For many people the price of car insurance is the big issue which makes them think twice before buying that dream car. Why pay massive insurance premiums for a car with a 2.0-litre engine when you could save hundreds of pounds a year sticking to your 1.2? However, it doesn't have to be like this and moneysupermarket.com has recently come up with a number of tips to help you save money on your car insurance. It could be the difference between you being able to afford to run that dream car or not.

1. 1 - Buy online - Many car insurance firms offer much cheaper deals online than they do in store or over the phone due to staff cost savings.
2. 2 - Don't stick to your present insurer - It's very easy to simply accept an offer from your current insurer. However, Money Supermarket believes that shopping around and getting quotes from different insurers can save the average driver £205 a year.
3. 3 - Offer to pay a bigger excess - Paying a higher excess will reduce your car insurance premium. However, be careful not to offer to pay more than you can afford in the event of an accident, with the average excess being £250.
4. 4 - Don't get third party cover - In the past, getting third party cover rather than fully comprehensive used to be the cheaper option. However, car insurers have grown wise to this and believe that these people are the ones most likely to have an accident. The price of third party cover now often eclipses that of fully comprehensive despite it giving you better cover.
5. 5 - Cut down your mileage - Reducing the number of miles you tell your insurer you plan to travel over the course of the year will also reduce the price of your policy. However, be careful not to go over the mileage you state as this will render your policy void.
6. 6 - Park in the safest place possible - Where you car is parked overnight will affect your premium, and if your insurers are told your car is parked on a driveway or in a garage, they are inclined to reduce the price of your policy. However, if your car is damaged when parked on the road outside your house when you have stated on your policy that you park in a garage, expect to have problems when making a claim.
7. 7 - Add an older additional driver - Adding an older person to your policy that lives in your household can save young drivers hundreds.
8. 8 - Fit an alarm - Fitting an approved alarm and/or immobiliser is another great way of reducing your premium, as it reduces the chance of your car being stolen.
9. 9 - Additional qualifications - Doing courses like pass plus, which can be done through most driving instructors, can cut 35% off the price of a policy.

Although these nine tips can save you money, they could end up costing you more if you lie to your insurer. Make sure that the information you give is accurate, otherwise they may refuse to pay in the event of a claim.

13 Oct 2010