1. Shop Around

The difference in price between companies can be quite significant. What one company may consider a high risk factor another company may not view as so important. Insurance companies arrive at a price for your car insurance by adding or discounting money after each answer you give to the questions they ask you. Each company has its own rules as to what they consider should increase or decrease your premium. By shopping around you get a better list of prices to compare.

2. What Group Is Your Car?                     

One of the important factors that insurance companies take into account is your make of car. There are thousands of different cars on the road so insurance companies divide them up into different groups, most companies will use the Association of British Insurers group rating. This splits up vehicles into 20 different groups. Generally speaking the higher the group rating for your car, the higher your premium will be. Some insurance companies may also combine your driving experience with the vehicle group to get a better idea of how high the risk is. This is one of the reasons why young drivers should consider buying a lower group car if they want to lower their insurance cost.

3. Consider Third Party Only cover

A Third Party policy is the minimum amount of cover legally required - it is also the cheapest. You should consider opting for this type of policy if your vehicle is of low value. In the unfortunate event of having an accident, any damage to a third party vehicle will be covered but any damage to your car is not. However, if your car is of little value then you may not be too concerned. It may not be worth paying extra for a Fully Comprehensive policy .

4. A Good Credit Rating

Most insurance companies are adopting credit scoring techniques as part of the overall calculation of your car insurance premium. By keeping a good credit history you may avoid any additional premiums that companies add to your price for having a bad credit score.

5. Buy On The Web

Most insurance providers now offer some good discounts for buying the policy over the internet. The theory is that by purchasing your insurance over the web, you are saving the company money by not requiring telesales and incurring free-phone costs, this saving is passed on to you in the form of a discount for buying online. If you've got prices by telephone then check your quote again on their website, you may be surprised at how much cheaper it is.

6. Have a higher voluntary excess               

During the quotation process you will be asked how much excess you want to have. Insurance companies will generally include a compulsory excess amount on the policy but give you the opportunity to increase this if you wish. The more the voluntary excess the lower your premium should be. However, in the event of a claim, you will have to pay a higher amount yourself, up to the total amount of excess on your policy.

7. Reduce Your Mileage                    

How many miles you do a year is a common question that can affect your car insurance premium. The more miles you do the more your premium is likely to be. Quotation systems and telephone agents will often suggest an amount of miles for you. Try and work out how many miles you will genuinely do, it may be less than the amount suggested therefore saving you money.

8. Clean Driving Licence

This may be easier said than done, by having few or no driving convictions, you can avoid being penalised by increases in your car insurance premium. Getting caught with a speeding fines is often not the only financial penalty you incur. Insurance companies take driving convictions seriously and it is usually an important part of their rating process. You can expect an increase in the cost of your insurance if you do get caught with a driving conviction, so it pays to be a safe driver. You must be upfront about any convictions as this is required by law.

9. Keep Claim Free

This ties in neatly with the above. The biggest factor affecting the cost of your car insurance premium is how many No Claims Bonus Years you have. Full No Claims Bonus is generally considered by most companies to be 5 years or more, this can give you huge discounts, in some cases up to 75%. By being a safe driver and avoiding potential claims, you can continually benefit by building up your number of claim free years. Every additional No Claims Bonus year you get, the lower your car insurance cost should be. Some companies give you the option of paying a bit more on your premium to protect your No Claims Bonus.

10. Be Realistic About The Value Of Your Car

Most of us think our cars are worth more than what they are. When asked the value of your vehicle during the insurance quotation process most people will often state an amount that is way above the real value of the car. People do this as they believe that this is what they will get back from the insurance company in the event of a claim. The reality is that any insurance company will only pay out what the car is worth at the time of the claim and not what you stated for the quote. By giving a high value, you can increase your car insurance premium as this is often a factor affecting your final payout.

11. Named Drivers

Adding drivers to your policy usually means a higher premium. A lot of people add a number of extra drivers on the policy just in case that person needs to drive the car, having all these drivers will push up your premium. Only name drivers on the policy that will definitely drive your car as this will lower your premium. If an unnamed driver needs to drive your car then most insurance companies will allow you to add a new named driver for a small cost.

12. Car Security

Most companies will give you a discount for having better security of your vehicle. An alarm and immobiliser will usually attract a small discount whilst having a tracker device installed may give you a larger discount. Some insurance companies may insist on having such devices installed on more desirable cars before they even consider offering you a price.

13. Paying For Your Insurance

By paying for your car insurance in one go, you can avoid paying additional interest charges that would be added if you opted to pay in monthly instalments. The interest charges can be quite high. If you can pay with say a credit card you usually get one month to pay this off as well as saving on your final insurance quote.