Saving on car insurance premiums can prove to be a difficult task for many drivers as households struggle to pay bills in this declining economy but experts say that motorists on low mileage can pay less.

The type of car motorists choose to drive can significantly affect the cost of premiums. Vehicles subjected to modifications of any kind regardless of whether it is aimed at enhancing its performance or not, can increase premiums. Drivers can cut down car insurance costs by having an alarm or immobiliser.

Parking a car in a safe area can help and experts say that although a garage is the best option, off-road parking is usually cheaper too. Car owners should also consider the area where they live because it might affect premiums with parts of London viewed as being twice as expensive as the cheapest postcodes in the country.

In order to get reduced premiums, drivers need to check the mileage noted on their MOT certificate particularly if the vehicle is older. Last year, a number of car insurance providers launched ‘pay as you go’ insurance which relies on technology to track where and when a car is driven, this may save on cost of premiums for those who drive at night.

Spreading the cost of premiums

Motorists who choose to make their car cover payments on a monthly basis are likely to benefit from spreading the cost of large car insurance bills however, this might attract high interest rate charges of up to 30 per cent.  Younger drivers paying monthly might need an extra £200 to £300 a year.

Adding another driver to your policy can help reduce costs for younger motorists although past practises suggest that many parents have fraudulently named themselves as main drivers of their children’s car prompting a crackdown from insurers. It is also possible to build up a no claims bonus as an additional driver in some policies and this could save occasional drivers car insurance costs.

Using someone else’s car as long as permission was sought from the vehicle owner is no longer accepted by many insurers as this clause is increasingly being removed so drivers must thoroughly check policy wording to ensure they are not affected.

Modify excess and add optional extras

For any driver, changing excess can mean that those who can afford a higher excess, are also likely to significantly cut costs. On the other hand motorists should consider reducing their excess as it might not necessarily result in higher premiums.  Additionally, some car covers may have a maximum number of claims per year.

Opinions are divided on whether drivers should pay around £20 Legal cover costs which could help claim back items such as excess, additional travel costs, damage to possessions in the car all of which may not be covered by the car insurance policy in cases where the accident was caused by someone else. However, drivers should consider this as an option especially if they do not have a legal cover through their employer or union.

Drivers without a no claims discount protection could lose two years worth of no claims bonus if they make even a single claim.