Tips For Cheaper Car Insurance

Here are some tips on how to get cheaper car insurance.

Regular readers will know that my favourite purchase ever has been my old VW Polo. I bought it second-hand when I started working for £1,800, and after eight years of hassle-free motoring sold it for £500. As depreciation goes I think that's pretty good going!

Indeed as you've probably guessed I'm not the sort of person that feels a need to have a new car every three years - in fact I've never bought a new car and doubt I ever will. What's more I take a perverse satisfaction in knowing that someone else has suffered the worst (i.e. the first three year's worth) of my car's depreciation!

Of course, when buying a car depreciation is just one of the factors to take into account as insurance, tax, MOT and running costs will happily eat up a chunk of your salary each year. And with diesel prices now hitting £1 per litre, and petrol not far behind, running a car is far from cheap.

But one way we can try and reduce our costs is by paying less for our car insurance - and there are a number of tips we can use to do this.

For a start, shopping around for a new policy each year instead of simply accepting our insurer's renewal premium is likely to save some cash. Insurers live in the hope that apathy will get the better of us (and mean we'll simply accept their increased premiums) so beat them at their own game and start looking early for alternatives.

Another way to spend less cash once you've found a great quote is to pay it all upfront, rather than in instalments. Although you may think that paying monthly is the cheap option, take a look at the APR (annual percentage rate) charged. In some cases, insurers are getting away with charging us over 25% APR -- which effectively means you've taken out a loan for your car insurance that you'll have to pay stacks of interest on!

Find out if you'll be charged for paying in instalments before signing up, and if you will, try to pay it upfront to avoid this rip-off. (If you don't have the cash consider a 0% credit card for new purchases to give you some breathing space).

Another thing to check when applying for quotes is whether or not your premium would be cheaper with an additional driver. By adding my husband to my policy, for example, I can often save between 10-20% of the premium - and younger drivers in particular could find substantial savings to be be made by adding Mum or Dad to their policy, even if Dad never drives the car.

What's more, home-owners often attract lower premiums (like married people they can be seen as more responsible!) so remember to mention this if you've bought a property.

And of course there are other tips that tend to reduce premiums, such as locking your car in a garage overnight, fitting an alarm and immobiliser, keeping your mileage low and even joining the Neighbourhood Watch in your area. And don't underestimate the value of a no-claims discount - five or more years without claiming can mean an annual discount of up to 75% - not to be sniffed at.

Finally, once you've found a policy you like the look of, check the details thoroughly to ensure you have all the cover you need. Happy motoring!

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