Insurance

You are required by law to have adequate insurance cover for your car. Before buying a car it's sensible to get a few speculative quotes, to see how much insuring your chosen car is going to cost you.

Choose the right type of policy

· Comprehensive cover is the most expensive route, but covers you for accidental damage to other people and their property, and damage to you own car and things inside it - even if the accident is your fault. It also covers you for theft, with most policies offering additional services like cover for broken windscreens. Comprehensive policies usually include medical and personal accident cover too, but check the small print.

· Third Party covers damage to other people and their property - not damage to your own car. Third party cover is cheaper than comprehensive, so if you have an older low value car, or don't cover many miles, why go to the expense of all-encompassing cover?

· Third Party Fire & Theft offers all that of Third Party policies, but adds cover if your car is stolen or damaged by fire.

Travelling abroad?

Don't forget to notify your insurers and get a Green Card for European cover. There's normally a small cover charge. Strictly speaking a Green Card is not required for travel in the EU, but the cover you get may be more limited than at home if you don't discuss this with your insurance company first.

No-claims bonus

Your first year's claim-free motoring earns you a discount of 30% with most companies, which then rises steadily up to the usual maximum of around 60% for five years of careful driving. Some companies, however, offer extra discounts for longer periods of driving without making a claim, so it's worth hunting these out if you have a good record.

If you have earned a healthy discount, you can protect it for a little extra each year. This means you can make two claims, often in a three to five-year period, without losing your discount.

Where to buy insurance

Direct or broker? For some drivers, dealing directly with an insurance company will save money. However, such companies usually are able to cherry-pick their customers, offering brilliant rates for low-risk motorists, but exorbitant ones for riskier drivers.

Brokers are more sympathetic - specialist brokers even more so. Many companies offer unique policies, such as younger driver schemes or hot hatch policies, and lots of people find they can save considerable amounts over a direct company quote.

This is because of a broker's ability to deal with a wide range of companies; they can 'shop around' to find the best policy for you. If you fit the direct-sell insurer profile, the savings are admirable - but don't ignore the potential brokers, who may well surprise you.

Top tips for cheaper premiums

· Limit the number of drivers on the policy - especially younger drivers who terrify insurance companies.

· Study insurance groups to find the lowest numbers. Groups range from 1 to 20, with the cheapest cars occupying the lowest third. Anything above group 12 or so is likely to be quite expensive to insure.

· Garage the car at night, or at least park it in a driveway. In high-risk areas, or when the car is particularly sporty, this is often a condition of insurance.

· Improve your driving with an advanced course. Some insurers offer discounts for drivers who have undergone additional tuition. For younger drivers, 'Pass Plus' is a widely acknowledged post-test course, recognised by many companies.

· Join an owner's club or society. Groups often negotiate deals with companies for reduced-cost policies. The small annual subscriptions could give you access to discounted insurance premiums.

· Bus to work. Claims are more likely in rush-hour weekday traffic, and crime is more frequent in public parking areas. Leave it at home to save the claims!

· Alarms and immobilisers can be expensive, but they can also save you a packet on your premium. Choose insurer-approved devised, noting that although 'Category 1' systems are dearer than 'Category 2' items, they are more secure and will thus attract better reductions. For many sporty cars, certificates showing the fitment of such systems are a condition of insurance.

· Don't ignore the potential of steering-wheel locks, either. Some of these are insurance-approved, and offer a useful visual deterrent to the casual thief.

· Increase your policy excess. Boosting the amount you pay from your own pocket in the event of a claim, say from £50 to £250, can often reduce premiums.

· Over-the-odds insurance can deter many people from the car of their dreams. Yet if you do the research and shop around, you may still discover a quote you can afford.