Accelerate to cheaper car insurance

The cost of car insurance has soared this year, according to research published this week by Confused.com in conjunction with consultant EMB. The price of the typical policy has increased by 14 per cent in the three months from April to June, the study found, taking the average annual bill to £599 from its previous level of £525.

This news will be especially upsetting for younger drivers, many of whom are already struggling to afford their premiums.

Motorists in the 18-25 age group generally face the highest insurance costs because statistics show they are more likely to be involved in accidents and to make claims.

So if you're in this age group, what can you do - aside from getting older - to bring the cost of the cover down?

Prove you're a good driver

To cut the cost of insurance, you need to understand what factors drive up premium prices. As we said above, age is a key determinant when insurers set policy rates, because new drivers - especially young men - are more prone to accidents.

So what you need to do is show you're not like these other risky drivers. Here's how:

Get experience

Insurers will cut the cost of cover to customers who have a record of not making claims, and who have built up a few years' no-claims bonus. This shows they are experienced, less risky drivers - exactly the kind of people insurers want to do business with.

One way for young or new drivers to build up this experience - and get their no-claims bonus more quickly - is by signing up to a policy with a bonus accelerator.

These policies typically run for slightly less than a year - usually 10 months - but give the policyholder a full year's no-claims bonus at the end.

So you would be able to build up three years' no-claim bonus in just two-and-a-half years.

This kind of policy is also suitable for anyone who has recently had to make a claim, and needs to start building up their no-claims bonus from scratch again.

What to watch for

Bonus accelerators are a good idea in principle but there are a few things to check before you sign up.

First of all, make sure that the price of 10 months' cover is good value compared with a year-long policy. There's no point paying the same total premium for a shorter period of cover, even if you are getting a bonus accelerator.

Secondly, bear in mind that some insurers may not recognise a 10-month no-claims bonus as a full year. So if you want to switch provider when your policy comes up for renewal, you may not be able to choose from all its rivals if you want to take your no-claims bonus with you.

Other tactics

* Take extra training. Passing an extra driving qualification shows insurers you are less of a risk, and many will cut your premiums accordingly.
Make sure you choose an accredited programme such as PassPlus: and weigh up the cost of taking such a course against the likely reduction in insurance prices it will result it. Bear in mind that some local authorities (including every council in Wales) may help you meet the cost of a Pass Plus course.
* Pick a lower-risk vehicle. Steering away from the stereotype of the boy racer is a good way of reducing car insurance costs. So opting for an older, more boring vehicle may not bring you extra street cred but it will save you money

About the Author

* Compare car insurance with Confused.com - between January and June 2010, 10 per cent of car insurance customers that gave a best alternative price saved over £188.85 by the confused.com website.

Author (bythesea). Submitted on Sun, 5 Sep 2010 Time: 8:05 PM

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