Car Cover Prices Go Up and Up and Up - Whats Actualy Happening. This Article on Sky.com was written by Emma Lunn and is a fantastic read with some great advice and information.

Car Insurance premiums have hit a record high – and a clampdown on bad driving habits could see drivers caught out and punished with premium price hikes as high as 50%. We reveal the bad habits to avoid – and show you how to cut the cost of motoring

Drivers convicted of using mobile phones while driving may be punished by premium price hikes as high as 50% while some insurers might not cover them at all, according to a recent study.

Research by price comparison website Moneysupermarket.com found that some competitive insurers, including LV= and Swiftcover, will provide competitive cover for motorists without a mobile phone conviction but will not return a quote for the same motorist who has been caught using a mobile behind the wheel.

For example a 40-year-old male driver with no convictions could get insurance with LV= for £161.92 but if he had received a penalty notice for using his phone behind the wheel the cheapest premium would be £248 with Express Insurance, 54% more.

Other insurers bump up the premium if you’ve been caught chatting or texting on your mobile while driving, most by around £20. Drivers illegally using their phones while behind the wheel will also face a £60 fine and three penalty points.

Car cover costs soar
The cost of car insurance is rising sharply - whether you break the rules or not. Figures from Sainsbury’s Bank last month show that the average car insurance premium has broken the £500 barrier for the first time. Drivers now pay an average of £514.36 to insure their cars - compared with £486.13 in July 2007 - a 5.8% increase.

However plenty of people risk not only fines and penalty points but an increase in the cost of their insurance by breaking the rules of the road. Insurer Swiftcover found that four out of five drivers admit to speeding on motorways and 18% have driven through a red light.

Tips to keep your car insurance costs down

Whether you have convictions for using your mobile or speeding or not, there are plenty of ways to drive down the cost of car insurance.

Shop around
Use an internet-based comparison service such as Confused.com or moneysupermarket.com to compare quotes but bear in mind that some insurers such as Direct Line aren’t featured by comparison services so get a quote from them too.

Don’t accept your renewal quote
When it’s time to renew your car insurance your current insurer will send you a renewal quote. In many cases this will be more expensive than the cheapest quotes from rival insurers – firms tend to rely on consumer apathy and hope you will simply accept their price. Don’t do this – instead get some other quotes and ask your insurer to match or beat them.

Pay upfront
When you have found a good deal try to pay for it in one go, rather than by monthly direct debit. If you pay monthly most insurers charge you extra for the privilege of spreading your payments.

Up your excess
If you’re prepared to pay a higher excess on your policy, you may also be able to enjoy cheaper premiums. The excess is the amount you will have to pay in the event of a claim, before the insurance kicks in and pays the rest.

Drive carefully
Not causing any accidents or making any claims will earn you a no claims bonus which will qualify you for discounts on future premiums. The no claims discount can be transferred between insurance companies and you could get up to 75% discount on typical prices if you manage to stay claim-free for five years.

Tips to cut the cost of driving

Drivers can also cut costs in other areas such as car finance, road tax and fuel. If you’re buying a new or second hand car it also pays to haggle over the price.

According to Sainsbury’s Bank, British motorists can save an average of £1,468 off the price of a new car if they are prepared to negotiate on the price. It’s also wise not to accept the finance package offered by a car dealership and shop around for a personal loan instead.

According to price comparison site uSwitch.com the average car dealership finance is at an APR of 10.17% - 2.77% higher than the cheapest unsecured personal loan available at 7.4% APR.

Time to think tax
When choosing a new car bear in mind how much road tax you will have to pay. In this year’s budget Alistair Darling announced that from 2009/10 there will be six new VED (vehicle excise duty) bands including a top band for cars emitting more than 255g of carbon dioxide per kilometre. These cars will pay an increased VED rate of £425. But greener cars, emitting 150g or less per kilometre, will pay less.

Finally, make sure you shop around for the cheapest fuel. Website Petrolprices.com allows users to enter their postcode and then lists the cheapest petrol stations in their area. The difference between the cheapest and most expensive fuel can be up to 15p/litre - £6 every time you fill up a 40 litre tank.

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