There are several easy ways to save money on car insurance premiums. You definitely don't have to pay an arm and a leg on your premiums and enrich the insurance companies unnecessarily, unless you really want to! In this article, l want to look at the six most effective ways that will help you to save a huge chunk on your car insurance premiums.

Now, here we go!

Combine your car insurance with you home contents cover

You are not most likely to see a huge impact on your savings when you follow this tip, but, there will definitely be a noticeable reduction in you premium. The logic here is a very simple one. It is that, if you have car insurance cover only with your insurer, then, should your car be stolen or be written off in an accident, they most likely lose your business completely.

However, if you have home contents cover together with your car insurance cover, then the business relationship does not end with the loss of your car. The insurance company will then reward you with a slightly reduced insurance premium.

Now, let's look at a closely related strategy.

Consolidate your vehicle policies into one policy

Now that your home contents have been combined with your car insurance policy, it is then time to add your other vehicles that are insured elsewhere into the same policy. You can also add you wife's vehicle to your policy and just specify her as the regular driver.

The logic on why this technique has a favourable effect on your policy premiums is exactly the same as the first tip and so, l wont be elaborating on it.

When buying, get a brand new second hand

One of the easiest ways to save money on car insurance especially when buying a car is to buy a second hand vehicle which is as good as a brand new vehicle instead of going for a brand new car. That way, you immediately save between 10 and 20 percent on the car insurance premium.

Let me explain.

You see, a brand new vehicle loses 10 to 30 percent of its value the minute it is driven off the dealership floor. The extent of loss of value will depend on how well the brand generally maintains its value.

However, what this means is that your car insurance premiums are based on the retail price even though the actual market value of your car has dropped. There is therefore an opportunity for a good saving on your car insurance premium if you settle for a second hand vehicle with probably less than 5,000 to 10,000km on the clock.

What if you have already bought your new car?

It's very simple. What you need to do is immediately start shopping for fresh car insurance quotes. You will be surprised at the price differences even if you bought your vehicle just last month.You however need to be careful to specify that you want your vehicle to be insured for its market value. l remember years back when l used to sell short term insurance in an inbound call centre, prospective clients were often asked whether they wanted to insure for retail value, market value or trade value.

A lot of people chose to be covered for retail value hoping that in the event of a total loss of the vehicle, the payment will be higher. The reality however is that your insurer will never pay you more than the actual market value of your vehicle. What this means is that if you are insured for retail value, you are incurring a higher insurance premium  unnecessarily!

By the way, retail value is exactly what your premium is based on for a brand new vehicle and that is bad news for your pocket especially considering that the vehicle assumes the lower market value just after leaving the dealership.

Review your policy once every year or two

Of all the different ways to save money on car insurance costs one of my favorite methods is to review your policy once every year or at least do it every two years. What most folks do is to get car insurance cover and then forget about it for the next seven years as long as the bank statement still shows the insurance premium deduction.

Big mistake and, here's why;

Everything on your car insurance policy, be it your car, household items, boats, caravans and so on, drops in value on an daily basis. This means that, after a year or two, your insurance premiums are then based on incorrect values. You also accrue no claim bonuses, age discounts and a lot of other underwriting factors ought to play in your favor and reward you with lower premiums.

Although insurance companies often claim that they automatically adjust your cover and premiums accordingly, l can tell you that they either don't do it or the changes are superficial.

How do l know this for sure?

l have on several occassions given car insurance quotes to people who have been insured for several years that are about half of what they will be paying. When they then confronted their insurers with the low premium, the response was to often drop it below the quote that l supplied.

So you can very easily save on you car insurance costs just by reviewing your policy annually.

Drive your car responsibly and avoid claims

One surefire method to guarantee an ever increasing premium is to drive like you are the only fellow on the road, often with a half finished bottle of Mainstay next to you. This will get you into unnecessary accidents and a record of continuous claims is real bad news for your car insurance costs.

By driving responsibly, you build for yourself an insurance record that classifies you as a low risk client ensuring that all the insurance companies will be hungry to give you a lower premium.

This is a record that you build over time. However, if you choose to drive responsibly, forget about that bottle of brandy when on the wheel and possibly add a defensive driving course to the mixture, you will have a great recipe for your insurance.

l have only covered a few of the various ways to save money on car insurance. The rest, are for another day.