Ways to save

• Shop around. Get at least two or three quotes.
• Make sure you're not over-insured.
• Negotiate! We continue to hear reports from members who've reached a better deal by good old-fashioned haggling. If you want to stay with your insurer but find cheaper quotes elsewhere, ask your insurer to match them.

How insurers set premiums

Insurance companies calculate their premiums from information about the general population. This means they initially charge a "general" premium based on statistical factors such as age, sex, vehicle storage, location, and vehicle make and model. They are allowed by law to discriminate on the basis of age and gender because they have the statistical evidence to back up their claims that certain groups - younger male drivers, in particular - are a higher risk for them.

But once the insurance company has built up a history with you, it's able to offer a premium that reflects your specific risk-profile as well as no-claims or other discounts.

Discounts

Make sure you get all the discounts you're eligible for.

No-claims discounts
Depending on how many years you've gone without making a claim, a no-claims discount could reduce your premium by 50 percent or even as much as 66 percent. (Discounts don't apply to the government levies attached to premiums.)

Higher excess discounts
Taking a higher optional excess - that part of the repair bill which you pay yourself - can result in discounts on your premium of a similar proportion. Check if your company offers this. Some companies have a minimum premium, and discounts can't be used to drop a premium below this level.

Age-related discounts
Discounts are often available for older drivers (usually those aged over 55 or 60), and some companies offer policies exclusively to people over a certain age. You can also do this the other way: agree that you won't let anyone under 25 drive your car, and that too can give you a lower premium.

Other discounts
Take out home and contents insurance along with the car cover, and you can get a package discount from many companies - up to 20 percent in some cases.

Companies offer other discounts like driving a hybrid car and driving under 5,000km in a year, so it pays to check what you are entitled to.

Not all companies offer all discounts. But it is worth asking if you get a discount for keeping your car in a locked garage, and for always using a professionally installed alarm or engine immobiliser.

You can also save money by paying your premium annually rather than monthly. Most companies will lift your premium by as much as 10 percent if you pay monthly.

Online quotes

Online quotes usually provide only a rough estimate of premium charges. One company recommends you check that the details for your online quote reflect your personal and car details. If you think it’s difficult to provide accurate information online, then talk to insurers so they can provide a quote that’s tailored to you and your vehicle.