How-to Guides » OLD GUIDE Beat the petrol price hikes

Cut the cost of your car insurance

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1) Shop around

Plug your details into an online comparison tool and you can apply for quotes from twenty or thirty insurers at once - now that really does save time. And as the AA reckons shopping around can shave £225 off the average comprehensive policy, it could save you a fair bit of money, too.

Start looking for quotes early, and get three or four. Don't assume that, as your insurer seemed cheap last time, it will be again next time. This is the easiest way to get ripped off.

2) Keep your initial quotes to yourself

Don't initally tell any of the insurers or brokers what your other quotes are. It's common practice in the car insurance industry not to offer the best price, but simply to beat the competition. Then, once you've got a quote you're happy with, go back to your favourite insurer and ask them to beat it.

3) Make your car more secure

The safer the location of your car, the lower your premium will be. So if you have a driveway, use it and state this on your form - don't just park your car on the road. Similarly, use your garage if you have one - you'll reduce the risk of theft that way. Adding an immobiliser, alarm and tracker to your car will also reduce the chance of it being stolen and therefore bring your premium down.

4) Word your occupation carefully

Believe it or not, your occupation can affect your car insurance premium. Unfortunately, certain occupations attract higher premiums than others. So if you're a journalist or estate agent, for example, you're likely to pay more because people in these professions generally claim more and are classed as 'higher risk'.

However, if you're in this higher risk category, simply altering the wording of your job description can help to bring the price down. But make sure you don't say anything completely inaccurate as this could jeopardise any claim you make. To find out more read The secret to cheaper car insurance premiums.

5) Pay the premium in full, upfront

While insurers offer us the chance to pay our premium in monthly instalments over a year, they don't do so for free.

Read the small print carefully and you'll see that most charge for the privilege - and an APR of 30% is not uncommon. That's almost twice as much as it costs to borrow on a typical credit card! Ouch...

Check with your insurer about monthly payments and if he charges, pay upfront. If you don't have enough money in savings and are sensible, a 0% card for new purchases can help you spread the cost.

And forewarned is forearmed - open a dedicated savings account for next year's car insurance premium and start stashing £20 away a month - and this time next year you'll have £240+ to cover that bill.

Compare car insurance quotes via lovemoney.com