Following announcements from leading motor insurers in 2007, premiums for UK car insurance are expected to rise by 10-20% in 2008.

A range of causes have been quoted from a rise in claims due to unforeseen events such as the recent floods to premiums already being artificially low for some years. Whatever the reason, a further hike in motoring costs coupled with increases in other non-discretionary costs of living mean that 2008 could be an expensive year for millions of UK residents.

Fortunately, there are a number of steps you can take to counter these inflation busting increases on your motor insurance.

STEP 1 – Don’t believe the hype

In spite of what the adverts tell you, there’s far more to finding the cheapest cover than simply comparing the quoted rates. It’s a complex, multi-variable product, and deserves your attention because of this. Have a good think about how and when you use your car and what type of cover and options you do and don’t need. Many of us continue to renew policies with options we don’t need and are unlikely to use.

STEP 2 – Search online for the right cover and the lowest price

The primary benefit of searching online is that you can compare cover and premiums from several dozens of companies using the same information. Price comparison sites will give you a baseline to work from, but be aware that not all comparison sites are equal. Some make assumptions about your needs and get quotes that may be higher or lower than you will be offered. Look for comparison sites that guarantee the accuracy of the premiums quoted.

STEP 3 – Look to non-traditional and newer insurers for the best prices

A surprising study run by a consumer advocacy group ran profiles through 33 insurance companies via multiple price comparison sites, and checking a number of risk profiles. The end result was that newer insurers, and insurers not known for doing motor cover consistently came out with the cheapest premiums. Don’t close your eyes to a good price just because the company isn’t “known” for car insurance.

STEP 4 – Get cover that matches your driving needs and habits

Many of us just buy a standard car insurance policy with cover options that we are unlikely to need or use. If you’re a low mileage driver with a standard policy you could be wasting hundreds every year. There is even a new ‘pay as you drive’ policy that uses a GPS device installed in your car so that your premiums are linked to your personal driving habits including mileage, the roads you use and time of day you use them.

STEP 5 – Reduce the risk and make the most of discounts

Premiums for any insurance are based upon risk, so to reduce your premiums try and reduce the risk of needing to claim on your policy. Factors such as where your car is parked, how it is used and how secure it is are all factored into premiums. A little known trick that can work with some insurers is to add a low risk named driver to your policy. A female over the age of thirty with a clean driving record can cut your premiums by 5-10%.