The RAC warned recently that car insurance costs are set to soar in 2004. An insurance expert outlines some easy steps you can take to cut premiums.
By Richard Mason
Director of internet brokerage firm insuresupermarket.com
Motor insurance can be expensive, and the biggest factors that influence your premium are age, gender and where you live.
Of course, these are things you cannot easily alter, but as with all insurance, these are not the only factors that influence your premium.
There are many things that you can actively do to help reduce your motor insurance costs.
Pay a higher excess
Many insurers will insist on a minimum amount that you have to contribute to any claim. This is commonly called an excess payment.
As a rule of thumb, insurers ask mature drivers to contribute £50 or £100 towards the cost of a claim while younger drivers can often be asked to pay more.
By offering to pay a higher excess, you can cut your premium substantially.
Protect your no-claims bonus
A full no-claims bonus can knock up to two-thirds off an insurance premium.
Many drivers find that after they have made a claim their premiums increase dramatically, in part because they have lost their no-claims bonus.
If you have a no claims bonus, ask your insurer whether you can pay a small additional premium to protect this bonus.
Although it may add to the cost initially, it will give you peace of mind that you can still make a major claim without sending your premiums rocketing the following year.
Membership of clubs, societies and trade unions can give you access to some special deals.
It is worth digging out any newsletters and literature to see what is available before you buy elsewhere.
Many companies will give you another discount if you already have insurance with them.
For example, Norwich Union Direct will discount your car insurance by 10% if you have a home insurance policy with them.
Add a named older driver to your insurance policy. If your parents will occasionally drive your car then adding them as named additional drivers can save you another 10% on your premium.
Likewise, remove any younger named drivers if they will no longer be driving your car from time to time.
Fit extra security to your vehicle. Thatcham-approved alarms are recognised by all insurers and most will discount your premium if you have these fitted.
If you have a garage then use it. Your car is less likely to be stolen from your garage or from your drive than if it is parked in the street.
Insurance companies recognise this and charge you less.
Pay your premium in one go
Most insurers will charge you interest of around 15% APR to allow you to pay your premium in monthly instalments.
However, some insurers charge up to 30% interest for paying in monthly instalments, making it a very expensive form of credit.
All in all, it is much cheaper to pay your premium in one lump sum.
Improve your driving skills
Consider taking an advanced driving course as many insurers will offer a reduced premium for better qualified drivers.
However, you should research the possible savings taking an advanced driving course will bring before committing to the cost.
The average customer can save 35% on their insurance premium by simply comparing several insurance companies against each other, according to the Association of British Insurers.
When you come to renew your policy, do not accept the price offered by your insurer at face value - shop around.
Even if you feel loathe to switch insurer you should still see if you can get a better quote and give your current insurer the chance to beat it.
The views expressed are solely those of Mr Mason and are for general information only.