Direct Line car insurance is helping to cap the cost of car insurance. With UK petrol prices hitting a record high at an average of 104.28p per litre last week and news of a £17 increase to the London congestion charge, British motorists are faced with yet another barrage of costs just to keep their car on the road.

In light of this, new customers who buy car insurance from Direct Line between 20 February and 31 May 2008 will get the promise that their premiums will be capped at the same price, at next year’s renewal stage.

Tony Chilcott, Head of Car Insurance at Direct Line, said, “Drivers have been watching their motoring costs rise dramatically in the last few years and it looks like the trend is set to continue. We recognise that people need to budget for the months ahead so that they can effectively manage their finances. New customers joining Direct Line will now be offered a helping hand as we cap their motor premium for the next year so it’s the same as they paid this year.”

The two years capped premiums offer is available from 20 February to 31 May 2008. Customers who purchase new Car Insurance from Direct Line in that period and take up the offer within 90 days or at least by 31st May will benefit from capped renewals. As long as there are no changes to their policy including, claims, cover, vehicle, drivers and convictions, Direct Line will not increase the premium on renewal.

Co-habiting or married couples could be wasting money on their car insurance premiums by failing to take out joint policies, new research from TescoCompare.com warns. TescoCompare.com highlights that co-habiting couples could be saving an average of over £100 by adding their partner as an additional driver to their existing car insurance policies.

Despite the savings to be had, TescoCompare.com’s research shows that two thirds of couples (65%) fail to tell their insurer immediately when they move in together, potentially missing out on a lower premium. Almost half of couples (48%) wait to notify their insurer until their policy is up for renewal, while 17% admit to not adding their partner to their policy at all.

Commenting on the research, Paul Baxter at Tesco Compare.com said: “Many people believe that adding their partner to their existing car insurance policy will immediately increase their premium, but in reality this is not the case. Car insurers assess the individual risk profile of each customer and couples living together typically carry a lower risk, resulting in lower premiums.

“There are many things drivers can do to lower their annual car insurance premium and adding your partner can be a very effective way of cutting costs. People should also check whether their current policy offers them the best deal for their individual circumstances and TescoCompare.com is an easy way for consumers to find the best car insurance policy for their insurance needs. TescoCompare.com not only compares the premiums for different car insurance providers but more importantly it compares over 25 policy features, making sure people know what exactly they are covered for.”

For further tips to reduce you car insurance premium, consider one of the following:

* Get a smaller car - the less powerful your car’s engine, the lower your insurance premium
* Consider where your car is kept – the more secure (ie in the garage) the better for your premium
* Be as accurate as possible about your annual mileage, your premium will go down, the fewer miles you do
* If you have more than one car, then make sure you register the highest no claims discount on the car with the highest insurance premium
* Consider the right voluntary excess for your needs – the higher excess you are willing to pay, the lower your premium
* Be as precise as possible about your occupation – different occupations have different effects on insurance premiums
* Get your no claims bonus right and make sure you have proof of it
* Value your car right – over/undervaluing your car can greatly impact on your premium

A survey by Young Marmalade, the combined car purchase and comprehensive insurance scheme linked to new and nearly new cars on a lease purchase plan for young drivers, has revealed the true cost of insurance fronting for Britain’s young drivers.

Crispin Moger, managing director of Young Marmalade said, “After quizzing young drivers on their insurance cover, we estimate that a quarter of a million new road users insure the car they drive all the time as a named driver on their parent’s insurance policy. This is classed as insurance fronting by the Financial Ombudsman and can result in a fine, conviction, penalty points and a loss of licence.”

Almost half of the young drivers questioned in Young Marmalade’s insurance survey admitted that they are insured on their parent’s policy. That’s bad news for both driver and policy holder. Insurance companies take a very dim view of insurance fronting and are clamping down on claims by drivers named as a driver but in reality, are the most frequent user of the vehicle. As many as 1000 claims a year are rejected due to fronting. As well as the claim being refused, the policy holder may struggle to find affordable cover in future as any denied claim must be declared. With insurance companies holding a database of claims history, there’s no escape for parent or child found guilty of trying to trick their insurance company with a policy class as fronting.

David Benedict of Young Marmalade says this very real cost of insurance fronting is having a profound effect on the market. It may even explain the dearth of affordable policies for young drivers. “Many insurance companies are assessing the risk and basing the premium on the youngest driver regardless of their status as a main driver, named driver or just an occasional driver of the car. Some companies are even withdrawing from this sector of the market as the claim ratios have gone through the roof. It is the driver’s responsibility to ensure they have adequate cover and a defence of ‘I thought I was covered’ will no longer wash.”

One possible cause behind the rise in insurance fronting is the cost of getting on the road in the first place. As a learner driver, driving lessons, licenses and exams all mount up but they pale in comparison to the cost of purchasing a safe, reliable vehicle and combining that with comprehensive insurance cover. Young Marmalade has tackled this problem head on with its car purchase and low cost, comprehensive insurance package. Offering no less than four NCAP star-rated new and nearly new cars plus affordable cover in the event of theft or an accident, the scheme is helping to tackle insurance fronting head on.

Now in its third year of operation, Young Marmalade is a signatory to the European Road Safety Charter, one of just four companies in the UK involved with vehicle safety to have signed up to the Charter.

In the space of a year, the average car insurance premium has increased by 5.24%(1). The latest Sainsbury’s Car Insurance Index(1), which provides a comprehensive independent analysis of online car insurance premiums across the market reveals that in December 2007, the average car insurance premium was £497.26, compared to £472.52 in December 2006 (an increase of 5.24%).

The index reports significant differences in premium increases based on age in the last twelve months. Those motorists aged between 40 and 50 saw an average rise of 7%, the highest of any age group, higher even than the under 25s at 6.59%. Those motorists aged 65 and over saw the lowest rise in premiums at 4.14%.

Joanne Mallon, Sainsbury’s Car Insurance Manager said: ”Car insurance premiums continue to rise which makes it all the more important for motorists to shop around for competitive insurance. The trick is cutting your costs without cutting your cover. Comprehensive can be a loosely used phrase with some comprehensive policies not even providing courtesy cars as standard.

“Cover and benefits vary dramatically between insurers but unfortunately, as many as one in five motorists(2) only obtain one quote when they buy car insurance, many saying they can’t be bothered to shop around or that they don’t have enough time to do this. Missing out on a cost saving is one thing but not taking the time to make sure you’ve got good quality cover could turn out to be a major regret.

“When comparing policies do so with a like for like approach, there’s no point comparing apples and pears, it’s worth considering why the cheapest policy is so cheap, you may find you’re not just compromising on service but cover too.”

The Index reveals that men continue to pay more for their car insurance than women on average - £525.35 compared with £453.38, and that the most expensive cover is for those motorists aged under 25 where the average premium is now around £1,256. The average motorist aged over 50 pays £333, which is the lowest for any age group.

Mallon continues: “There are a number of factors leading to higher premiums, including a rise in the cost of personal injury claims and also repairs(3). However, given that nearly 70%(4) of us admit to some form of potentially dangerous activity whilst driving such as eating or using mobile phones, by cutting out these practices we can reduce the chances of being involved in an accident.“

(1) Price comparison figures based on independent research conducted by Consumer Intelligence December 2006 to December 2007. This was based on regular monthly monitoring - The Sainsbury’s Bank Car Insurance Index reviews prices from over 40 insurers representing at least 80% of market share.

(2) 967 people were interviewed by GfK NOP between 6th and 8th July 2007. Interviews were conducted over the phone. The consumer omnibus research conducted by GfK NOP uses a large sample size that reflects the demographic profile of GB. Given this it is possible to extrapolate figures and make projections from the research results within appropriate confidence intervals.

(3) Association of British Insurers
(4) 1,012 people were interviewed by TNS between 2ND and 6th August 2007. Interviews were conducted online. The consumer omnibus research conducted by TNS NOP uses a large sample size that reflects the demographic profile of GB. Given this it is possible to extrapolate figures and make projections from the research results within appropriate confidence intervals.

Michelle Slade, analyst at Moneyfacts.co.uk comments: “Motorists everywhere are now searching garages all across the country to find the best deal for the new 08 plate cars. Unfortunately the same effort is rarely put into sorting out the best finance and car insurance for the vehicle and getting this wrong can be an extremely costly mistake.

“It may seem easier to opt for the forecourt finance that’s offered at the garage, but checking out what’s on offer on the rest of the market could see you making significant savings.

“Latest Moneyfacts.co.uk research shows that on a £15K loan the difference between the best and worst loan is nearly £3K. This increases further to a staggering £7.2K if you take payment protection insurance with the loan.”

What else should you take into consideration?

“When shopping around, make sure that you compare the total repayments, particularly when opting for provider’s insurance. Payment protection does not have to be taken out with a loan. Independent providers such as Paymentcare or British Insurance offer a more flexible product at a fraction of the cost.

“Remember that the majority of the market offers typical or personal pricing. Don’t assume you will get the rate advertised; the rate you will receive will depend on your credit record.

“Don’t be swayed by incentive gimmicks such as free breakdown cover. Usually these loans are much less competitive and the saving you make will more than pay for separate cover elsewhere.”

How else can you save money?

“It’s not just on the finance where you can save money. Once you have selected and paid for your new car, you will need to get it insured. Car insurance providers target certain types of customers. If you were to phone around for quotes, not only would you be wasting a large amount of time, you might not necessarily call the provider that could offer you the best deal.

“Help is at hand – Moneyfacts.co.uk compares over 90% of the car insurance market. By just entering your details once you can find the cheapest deal for you in only a few minutes. Our latest research shows you could save a further £732 just by opting for the cheapest deal:
Male 22yrs old Female 30 years old Male 50 yrs old
Best price £595.00 £315.67 £235.04
Worst price £1,327.00 £1,000.00 £728.00
Difference £732.00 £684.33 £492.96
Figures based on a new Ford Focus Ghia, driver having full clean licence, no convictions taken out in NR1 postcode
Source: Moneyfacts.co.uk 19.2.08

“Doing the research into the finances for that new car before you visit the forecourt will help you make an informed choice and with the savings you have made, you could afford to pay for some of those optional extras.”

Car insurance premiums rose by 4.5 per cent in the second half of last year, according to research from price comparison site moneysupermarket.com.

The average lowest premium stayed constant at £290 from 2006 through to the first half of 2007, but then the rise started to kick in, taking the average premium for the second half of the year to £303.

Research conducted during the most popular months for buying car insurance1 showed 64 different providers all coming in with the most competitive quote at some stage, with Swiftcover and the Post Office taking top spot most often.

Richard Mason, director of insurance at moneysupermarket.com, said: “As an internet-only provider, Swiftcover has a price advantage over many of its rivals because its overheads are so low. But it is great to see the Post Office and the RAC also being very competitive.

“The key thing for drivers is that 64 different providers are successfully competing to produce the cheapest premiums for them. The market is not monopolised by a handful of providers any more and this can only be good news for motorists.”

The average lowest premium for a male driver climbed by 4.9 per cent to £320 in the second half of 2007, while female premiums climbed by 4.1 per cent to £279.

Richard Mason continued: “Men are continuing to pay about £40 more for their insurance than women, but this has as much to do with the type of cars they drive. Men are more prone to buy cars with bigger engines, which then attract higher insurance premiums.”

The research also shows that drivers in their sixties continued to enjoy the cheapest quotes of all.

Richard Mason added: “Generally motor insurance becomes cheaper as you age. Yet a fascinating thing about the research was that females in their thirties have consistently been paying less for their insurance than those in their forties over the past two years.”

Post Office Financial Services now has over half a million car insurance policies in force, strengthening its position as one of the fastest growing financial services providers in the UK.

Post Office Van Insurance - which is aimed at small business owners - is also booming, hitting over 12,000 sales in just under a year, taking it well on the way to having the biggest market share for this product.

Company CEO Patrick Waldron said: “The Post Office is one of the UK’s most trusted brands, and in the current financial climate consumers are looking for financial products that give them a good deal with no hidden catches.”

Car Insurance from the Post Office, says a company statement: “Offers drivers great value cover through a panel of insurers to search for the best deal. This, along with offers of £50 cash back or one month free, has resulted in more than 500,000 policies for the Post Office since launch in July 2004.”

Patrick continued: “Our aim at launch was to become a major player in the financial services industry and signify how the Post Office is changing. Just under four years on – and with almost 1.4 million customers - we’re one of the fastest growing financial services providers in the UK, and on track to achieve our goals.”

“We believe in offering customers fairer, easier and better financial services products. For example, introducing not only a competitive and comprehensive van insurance product, but adding features such as physiotherapy sessions after an accident. Getting back on the road quickly is what matters to small businesses most.”

Those born in the Year of the Rabbit less likely to make a car insurance claim. On 7th February Chinese New Year is celebrated to welcome in 2008, the Year of the Rat. But does your Chinese astrological sign influence your ability as a driver?

Online car insurance specialist elephant.co.uk thinks it could. It looked at data from over two million policyholders and found that some astrological signs are definitely more likely to hold a motoring conviction or have an accident than others.

If you, or those whose car you regularly ride in, are a Sheep (born in 1943, 1955, 1967 or 1979) you might want to watch out as it was Sheep that topped the list of the most dangerous drivers. Sheep were closely followed for both accidents and motoring convictions, such as speeding or jumping a red light, by those born in the year of the Monkey (1944, 1956, 1968, 1980).

At the other end of the scale and having both the least accidents and convictions are those born in the years of the Rabbit (1951, 1963, 1975, 1987) and Tiger (1950, 1962, 1974, 1986).

elephant.co.uk managing director, Brian Martin said, “Although just a bit of fun, our research does suggest the year you were born could affect your driving ability.

“Having looked at the character traits of the different animals in the Chinese zodiac, we might have expected fiery Dragons to be the most likely to have motoring convictions. We certainly wouldn’t have expected unpredictable Tigers to be some of the safest drivers, but perhaps more likely to be the most accident-prone.

“Mild-mannered Sheep do seem an unlikely sign to top the list of both accidents and convictions. I wonder if their daydreaming tendencies mean they’re not paying enough attention to the road. It was much less of a surprise to find reserved and cautious Rabbits make some of the safest drivers.”

As for those born this year or other years of the Rat, they are at the safer end of both lists. As for their personalities, they are supposed to be hard working and sociable but can be selfish.

With car insurance claims soaring in the Winter months (provider esure reported a rise in motor insurance claims by a shocking 130,000 last November, due to adverse weather conditions), there are ways that you can keep safer on the Nation’s roads.

Research from the provider revealed that many motorists felt that it was the smaller, local roads that are the most dangerous to drive on, mainly due to lack of grit in icy conditions. They suggest:

• Ensure you look as far ahead as possible while driving, giving you plenty of time to see hazards and respond accordingly
• Remember that you are driving in dangerous conditions so drive accordingly - slow down; avoid sudden turns of the steering wheel; do not panic brake; and do not be over-zealous when accelerating
• Should you skid on an icy road, decelerate; release the brake pedal fully or ease off the accelerator and turning the steering wheel in to the direction of the skid.
• Be aware of shaded areas, such as roads under bridges, or under the shade of trees. The surfaces there freeze much faster

Research by LV= has revealed that 2.3 million drivers* are still not always wearing a seatbelt 25 years after it becoming law. This is despite the fine for not wearing a seatbelt being as much as £500**.

In the UK there are 37,000 fatal or serious injuries every year on the roads***, many of which could be prevented by wearing a seatbelt.

Aside from the cost of fines and safety implications, any insurance claim made by a driver who has been injured whilst not wearing their seatbelt is likely to be reduced even if they are not at fault in the accident.

The problem of not wearing a seatbelt is even worse when it comes to passengers.  Nearly four in ten (38%) said they don’t always bother to belt up in the back, despite it also being compulsory for the last 17 years.

Of these, the worst culprits are the 35 – 44 year olds, who are twice as likely to forget or not really think about belting up in the back as 18 - 24 year olds (52% to 26%).

Martin Milliner, Head of Technical Claims at LV=, said: “It’s particularly worrying that people in their thirties and forties are apathetic to using a seatbelt, especially as they are more likely to be travelling with their children than younger drivers, sending out the wrong message.     We would really urge drivers and passengers to think again about their safety and ensure that everyone in the car is buckled up on every journey – in some cases it could be the biggest favour they ever do for friends or family.“

People cite a variety of reasons for their reticence to wear seat belts - 43% claim they just ‘do not think about it’ or simply forget.

The top reasons motorists gave as an excuse for not wearing a seatbelt were:

• Forgot (22%)
• Didn’t think about it (21%)
• Was going on a short journey (16%)
• It’s too fiddly (14%)
• It’s uncomfortable (11%)
• It’s not law so I don’t bother (3%)
• It crumples my clothes (1%)
• I don’t think it will make a difference in an accident (1%)

Men are the least safety conscious with 38% of backseat male passengers admitting they don’t always wear a seatbelt.

As with drivers, passengers who are injured in a car accident whilst not wearing a seatbelt could find any compensation is reduced, even if the driver of the vehicle they are in is not at fault and the other road user is responsible.

The research found that motorists are very confused about who is responsible for ensuring that passengers are belted up – both in the back and the front. Nearly two thirds (65%) of British adults wrongly believe that it is the driver’s responsibility to ensure that a front seat passenger has belted up, when in actual fact the responsibility is their own regardless of where they are sitting in the vehicle.

Financial penalties for not wearing a seatbelt can be severe.  Fines can be as much as £500 and involve a court appearance. Despite the public’s relaxed attitude to wearing a seatbelt the Police take the matter very seriously. In 2004, Police issued more than 210,000 fixed penalties, written cautions and prosecutions.

Even though the law states it is the responsibility of the passenger, LV= is urging drivers to remind anyone travelling in their car to belt up to reduce injuries and deaths on UK roads. Nearly half of all drivers in the 25 – 34 year old age group (48%) said they don’t always check if their passengers are wearing a seatbelt in the back, potentially putting both themselves and other passengers at risk.

Martin Milliner, Head of Claims at LV= comments; “Whilst it is the passengers’ own responsibility to make sure they are properly buckled up, drivers should also ensure that this is happening, as much for their own safety as the passengers. Many passengers said they forgot to belt up when in the back of a car so a timely reminder from the driver before setting off could save the lives of family and friends travelling in their vehicle.

“It has been 17 years since rear seat belts became compulsory and our research suggests that the message is still not getting through and confusion remains regarding the law and the consequences. Over 2.7 million adults**** never wear a seat belt when travelling as a passenger in the car and over 3.5 million***** don’t believe there is a fine for being caught without one.”

 Notes

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,047 adults. Fieldwork was undertaken between 31st - 2nd January 2008.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

* 33.3 million motorists in GB (according to the RAC Foundation). 7% admitted to not always wearing a seat belt.   33,300,000 / 100 x 7 = approx 2.33 million

** lawontheweb.co.uk

***  Brake.org.uk

**** 44.5million adults in the GB (electoral commission) 1% of passengers in the front never wear a seat belt and 5% of passengers in the back said they never wear a seatbelt. 44.5m / 100 x 6 = 2.7m

***** 44.5 million adults in GB 8% don’t think there is a fine for an adult not wearing a seat belt in the back of a car 44,500,000 / 100 x 8 =  approx 3.56 million