The number one thing to remember, and to always keep foremost in your thoughts when purchasing any kind of insurance - particularly for your car - is that insurance companies are out to make money.

It might seem simple common sense to state that so bluntly, but when you are being dazzled by specious guarantees and spurious quotes, it is easy to forget. So what should you look out for?

Insurance companies - they quote themselves happy!

There are some factors that are unavoidable, so it’s best not to worry about them and move on. For instance, if you are male and under the age of 25, your insurance policy will inevitably cost more than nearly anyone else on the road. By the same token, if you live in an area with high car crime, your premium will go up, often substantially. As much as we would like to be able to move house and travel through time, these are not pragmatic solutions.

However, there are steps you can take to significantly reduce your premium.
If at all possible, and especially if you are a young driver, start with the car you buy. All cars in the UK are classified within an insurance group, from 1, the cheapest, to 20, outrageously expensive. The main defining factors in which group your car will be placed in are: the initial cost of the car if bought new; the size of the engine and its performance figures; the security measures built in to the car; how costly it would be to repair and replace parts if the car was involved in an accident. As a rule of thumb, hatchbacks with small engines such as the Fiat Punto, the Renault Clio and the Ford Fiesta are all cheap to insure.

Even larger, family size cars can be cheap to insure if chosen well. The Ford Focus, for instance, is only rated as a group 4 car at the time of writing. Try avoiding cars like the group 20 Porsche 911. You might be sacrificing a few seconds on your 0-62mph time, but you will be saving a hefty wad of cash to spend when you get to your destination. Also, get a Thatcham-approved alarm system for your car. Thatcham are beloved by insurance companies and their approval can go a long way to helping reduce your premium for a small initial outlay. Whatever you do, resist the temptation to modify your little hatchback. This can send your policy through the roof, and neon blue lights are ugly and illegal.

Do you think this will affect my premiums?

Another way to shave a few pounds off your premium is to ensure your car is parked securely. If your car is usually parked on the street overnight, your policy will cost more. Insurers like the idea of your vehicle being cooped up in a nice secure garage, or at least fenced off on a driveway where thieves will be a lot more conspicuous. If space in your area is limited, especially inner city, see if you can purchase a secure parking space in the local area, as the permit fee will most likely cost less than the additional fee on your premium.

Insurance companies also like you to show them the money. If you agree to pay a higher insurance excess (the cost you agree to cover if a claim is made) then your premium will go down. Bear in mind that you need to consider your excess cost carefully, as if you have an accident then you will need to have the equivalent sum stowed in your savings for your insurer, and you will not be guaranteed the excess fee back unless the third party covers the entire cost of your claim.

For new drivers, it will be worth investigating the government’s Pass Plus programme. It’s a course designed to improve your driving skills after you have passed your test, and in many instances it can save on your quote, though make sure you investigate how much you will be saving before you fork out for the course itself, as in certain areas it can be a false economy.

Get yourself on an advanced training course - it helps you do things like this!

These tips are useful for taking a few notes off your policy, but if you want to save big bucks then be safe and don’t be lazy. Firstly, insurance companies love drivers who have proven they are safe. The longer you go without an accident, the bigger your no claims bonus. The bigger your no claims bonus, the bigger your saving. Having five years no claims can save you up to 50% on your premium, by far the biggest saving you can make. Secondly, when it comes to renewing your policy, shop around. I saved a hundred pounds myself on my last renewal simply by switching insurance companies. While you may not make such a big saving, it is still worth a couple of hours of your time. Make sure you get written notice off your previous insurance company of your no claims bonus to take to your new provider.

Defend your no claims bonus to the bitter end

Finally, a bit of myth busting for you. There is an old (illegal) trick of insuring a car in a more experienced driver’s name and then putting yourself on the policy as a named driver in order to reduce the initial premium. Now that insurers are savvy to this, they will ask for the main driver of each vehicle and how many vehicles there are in total for a household, and will check the log book if a claim is made to ensure details match the store you’ve given them. So don’t tell porkies. On that note, if you plan on changing insurers, be aware that they will check details with each other, so don’t lie about any past claims you have made.

Insurers will also ask you for your average yearly mileage. Be accurate with this figure and inform your provider if you exceed that figure, as it could invalidate your policy if you need to make a claim when you’ve given them a figure of 10,000 miles and you have your accident 12,000 miles down the road. Most importantly, the law and the insurers do not necessarily match up. It is not against the law to smoke while driving, but if you make a claim for an accident and the insurers find out you were puffing away at the time, they could bust you for negligence.

Let your insurance company know when you rack up the miles..

Remember: they are not your friends. This is not to scare you and make your paranoid, it’s a simple truth. They are out to get your money and get out of giving you money wherever possible, so don’t let them have any excuses for doing so. A few extra pounds for a lower excess, safe driving and conscientious maintenance of your policy will ensure that when you do need to make a claim, it will go as smoothly as possible.

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