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Helpful tips to cut the cost of your car insurance

Car ownership is expensive. You not only have to buy a car, but you also have to tax and insure your vehicle - not to mention fill the tank with fuel. The cost of car insurance can take a big chunk out of your driving budget; here are some helpful tips to help you get your annual premium down.

Make sure you shop around

The Association of British Insurers reckons you can save as much as a third on your annual premium, simply by shopping around. So don't just automatically accept your renewal quote each year.

Request a higher excess

Most insurance policies include an excess charge (the amount you have to pay towards any repairs that are claimed for). If you are prepared to increase this, you can get a reduced premium.

Limit your mileage

If you drive your car only on local roads at the weekend, you are statistically less likely to be involved in an accident than someone who commutes along a busy motorway every day.

Talk to your insurer about your driving habits because a low mileage usually leads to a low premium. Our car insurance comparison tool features a useful calculator to help you work out how many miles you drive each year. But make sure the figures are accurate because you could invalidate your policy if you breach the agreed mileage limit.

Agree to a mileage cap and this can earn you a discount simply because cars that are on the road less often are less likely to be involved in an accident. AA Insurance reckons that accepting a 12,000-mile annual cap would earn a 5 to 10 per cent discount.

Avoid the middle man

Direct Line claims that buying through intermediaries such as brokers can increase the cost of insurance by up to 30 per cent.

Buy through the internet

Many insurance providers offer an automatic 5% discount for online transactions.

Consider downsizing your car

Cars that are worth less and have smaller engines qualify for lower insurance bands, which means they attract lower premiums.

Keep your car garaged

Keeping your car in a garage or on a drive rather than out on the road can take between 5 and 10 per cent off your premium.

Have a black box fitted to your car

This is where the insurer installs a device that monitors how the car is being driven so that careful driving can be rewarded. You can also agree to curfews that limit what times of day you can drive, it works especially well for young drivers.

Don't assume third party cover is cheaper

Third party insurance is the legal minimum, covering you against damage caused to other people's property and the cost of any compensation for injuries. However, this isn't always cheaper than fully comprehensive cover, which covers your own vehicle as well, because the insurer can assume you care less about your car and are therefore more likely to have an accident.

Don't pay by direct debit

Paying for your insurance in monthly instalments, rather than in an annual lump sum makes it seem more manageable. But it's likely to cost you between 10 and 25 per cent more in the long run. 

Choose your car with care

Insurers divide cars into 50 groups according to various factors including their engine size and the likely cost of repairs. The higher the insurance group, the higher the premium. So if you are buying a new car, it pays to check its rating. You can find out details of car insurance groups at www.thatcham.org. Don't modify your car with spoilers or fancy wheel trims because many insurers will load the premium.

Drive with care

Points on your licence mean pounds on your premium, so obey the rules of the road. If you have committed a serious traffic offence, you could find it difficult to buy cover at all.

Don't claim

Drivers who don't make claims can build up a no-claims discount (NCD). The NCD can be valuable, knocking more than 50% off your premium after five consecutive claim-free years. If you have a minor accident, it can therefore work out cheaper to pay for the repairs yourself and safeguard your NCD. You can also pay to protect your NCD - and the cost is often worthwhile. Some policies allow you to make a claim in set circumstances without it affecting your no claims bonus. You'll pay a small premium up front, but it could save you a fortune in the long run.