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Photocard driving licences replaced paper ones in 1998, but under the new system you must renew your photo every 10 years. Yet as at July 2011, 1.7 million photocard driving licences are out of date, according to the DVLA. For full info and how to renew, see the Is Your Driving Licence Valid? guide.

Any extra security will help. Fitting an alarm or immobiliser (especially one approved by Thatcham) will reduce the bill substantially.

Plus, as theft and accidental damage add a wedge to insurance costs, if you leave your car in a garage or driveway it's a big theft deterrent and means accidental damage is less likely.

The more points on your licence, the higher the cost. While speeding points remain on your licence for four years, insurers usually check for convictions during the last five before they are removed from your record.

One speeding conviction may only affect the price of cover by around 5% - but any more will bump up the price, with two offences costing around 20% more.

Being caught with a mobile phone is more serious, and can double your quote. It can also give you three instant points on your licence, which stay on for four years. Approved hands-free kits are fine if used properly.

Before we begin, it's important to understand that there are three different types of car insurance: third party, third party fire and theft, and fully comprehensive (full definitions below).

Logically, third party insurance should be cheapest as it offers a lesser level of cover than fully comp - yet this isn't always the case. So get quotes for third party and fully comp just in case it's cheaper. Plus always make sure you check your policy so you know exactly what you are and aren't covered for in the event of a claim.

It's likely third-party buyers are on average a higher-risk group, perhaps as insurers may feel they care less about their cars, and so prices are pushed up. To illustrate this, in one low-risk driver quote we found £290 for fully-comprehensive, compared with £406 for third-party. This isn't a hard rule, but always check both.

Third party

The minimum level of cover you need to legally be able to drive on the road is called third party. It used to be the cheapest type of insurance, but bizarrely fully comprehensive policies can now sometimes be cheaper.

Third party covers you for any damage you cause to another person's vehicle, and gives protection for any passengers in your car.

Therefore, if you're in an accident and it's your fault, you'll have to pay for any repairs to your own car yourself, as your insurance won't cover it. It may be more expensive because it's assumed you care less about your car and are therefore more likely to have an accident.

It's generally the most suitable for those:

• With cars worth less than £1,000
• Aged under 25 (though also read Car Insurance for Young Drivers
• Without a no-claims bonus
• Living in a high risk area

Third party fire and theft

Third party fire and theft has the same level of cover as third party insurance. However, self-evidently, it also provides assistance if your car is stolen or set on fire.

Fully comprehensive

This is the widest level of cover, but can sometimes be the cheapest. The big advantage is that if you have an accident and it was your fault ...

you'll be able to claim the cost of repairing your car, and cover personal injury costs, as well as those of other drivers.

The cover also includes accidental damage and vandalism, for example if somebody causes damage to your car when it is parked in the street and drives off.

Plus you'll usually (though not always, so do check your policy details carefully) be able to drive other people's cars if you have their permission, although this is likely to only be third party. Sometimes you'll be covered for driving hire cars too.

Fully comp is a good idea if your car is worth more than £1,500, and gets more important the more valuable your car is. Many insurers will only offer fully comprehensive cover for cars over a certain value anyway.

There are a few ways of cutting the cost of fully comprehensive cover. For example, Tesco Value* insurance offers a comprehensive policy but has a higher compulsory excess, which lowers the cost. However, this doesn't automatically make it cheapest; ensure you first use the comparison sites below to check.

If you've considered adding a second driver to the insurance, even if they won't use the car often, this can smooth out the average risk and sometimes reduce the premium. Those with an additional record for driving well are likely to help make bigger savings, but anyone that's in a lower risk category than you can help.

It won't always work, but its worth playing with quotes to check. Don't confuse this with fronting, which is illegal - more below.

At no point should you add your name as the main driver on someone else's car, such as one of your children, instead of them. This is known in the industry as 'fronting' and is fraud. When you come to claim, this will often be checked out and your insurance will be invalidated and can lead to prosecution, so don't do it.

The less you drive, the cheaper your insurance may be. Where possible, try to reduce your mileage. This may sound trite, but actually the real key is incorporating the extra insurance cost when you make long journeys, not just the cost of petrol compared to taking the bus or train (also read Cheap Trains article).

Anecdotally, though many simply get a quote for 10,000 miles per year, MoneySavers have reported that 5,000 is the cheapest quote - though we haven't tested this. If you drive your vehicle on business, always declare this rather than just include the business miles as personal, or the policy may be void.

If you haven't got normal circumstances, eg, you've made a claim in the past few years, have a modified car or expect to drive 100,000s of miles a year, tell the insurer. If you don't and then try to claim, even for an unrelated issue, your whole policy may be invalid.

Plus you should also tell your insurer about any changes. This is crucial as it reduces potential problems in the event of a claim, even if it's just your address. Trying to get insurance after you've had a policy cancelled due to a fraudulent claim is very difficult, very expensive and will follow you for the rest of your life.

A change in circumstances includes moving jobs, as insurers believe this can affect your risk. Scandalously, the unemployed often (though not always) pay higher rates for their car insurance, so do inform your provider if you're out of work but also do the full checks below to see where you can get the cheapest cover.

You may also save on insurance if you're in a more stable relationship, ie, if you're living with a partner rather than listed as single.

Sexy it might be, MoneySaving it ain't. The more changes you make to your car, barring security ones, the more you'll be charged.

Always make sure you inform your insurer of any modifications to your car, whether you made them or not, or it may invalidate your policy. A modification is anything that isn't part of the standard vehicle specification, including factory-fitted optional extras such as alloy wheels.

It's worth considering going for a policy with a higher excess (the amount of any claim you need to pay yourself). Many people will find claiming for less than £500 of damage both increases the future cost of insurance and can invalidate no-claims bonuses, meaning its not always worth making a claim.

So why pay extra for a lower excess? A few policies will substantially reduce premiums for a £1,000 excess, so try this when getting quotes. The downside of this is if you have a bigger claim you'll have to shell out more, so do take this into account.

With insurance, remember - the golden rule is:

If you've read these tips and thought, it's easy to lie about this, then of course you're right. Yet lying on your insurance form is fraud. It can lead to your insurance being invalidated and, in the worst case, a criminal prosecution for driving without insurance. Don't do it.

There's another quick tip to lower your costs: tweaking your job description could save you cash. Insurers decide prices depending on historic risk assessments, and your occupation plays an important part in this. To help we've built a fun Car Insurance Job Picker tool to show the riskiest jobs and see if small tweaks to your job description could save you cash.

Prices change at different times of the month

Plus, there's a technique to see if you can get cheaper cover at different times of the month; but it's a little time-consuming...

Run your quotes a month before renewal and click through to the cheapest three insurers' sites making sure you save the quotes. Some, although not all, hold their prices for up to 28 days. Then, nearer your renewal date, go back to check the price and buy if it's cheaper, or revert back to the saved quote if it's not.

The combination of popularity, engine size and value all impact on car insurance cost. It's worth considering this when you buy. Insuring a super-powerful beast of an SUV for a 17 year-old would cost enough to make Bill Gates weep.

For every year you don't claim on the insurance policy, you get a discount. This makes a substantial difference to the overall cost. If you do claim, it's usually two years off this discount. This deliberately encourages people not to claim. You can also get a protected no-claims discount so that claims don't impact on it.

Remember though, if you do have an accident, even if you don't claim to keep your no-claims discount, the price of the policy can rise simply because you may be assessed as a higher risk in the future.

Some schemes also offer an accelerated no-claims bonus, ie, giving you a year's no-claims bonus after 10 months, such as Admiral's* Bonus Accelerator.

Switching from a company car to a private car

If you've been driving a company car and try to find private insurance online, it's tricky to find insurers who allow your no-claims bonus to count. By contacting a broker, they would be able to assist in locating an insurer that will allow a no-claims claim-free bonus to match the number of claim-free years you have been driving a company car.

Yet if you phone up, most companies will give some form of introductory or special bonus to those switching to a private car. This is because these discounts are often applied manually as the online systems don't automatically allow a discount.

The overall tactic is to first use the usual process below then call the top three (or possibly five) providers listed and discuss this no-claims company issue.

Beware pay monthly options - usually the insurer actually just loans you the annual cost and then charges interest at hideous rates on top. So either pay in full, or if you can't afford it, use a credit card with a lower APR rate (or better still, a 0% credit card for spending ensuring your repayments are big enough to clear it within a year).

Not all insurers are as bad as each other though. Here's a selection of what some of the big guns charge:

If your insurance allows it, driving someone else's car instead of yours can be a way to cut mileage. Check your policy details carefully to find out if you can.

If you have fully comprehensive insurance then sometimes, not often, it includes 'driving other cars' cover. This provides you with third-party cover whilst reducing your mileage and therefore the cost of your own policy. Check with your insurance provider whether you're covered.

Generally, insurance is a lot cheaper for a moped or motorbike than for a car. Plus, some insurers may put any no claims bonus from bike insurance on your car insurance too if you later get your car insured with them. Yet do take safety into account - if you're in an accident you're much more protected if you're in a car. See the bike insurance guide for more.

Brokers and screenscrapers may seem like they're doing a similar job, as each search a number of different insurers. But they're radically different beasts. A good analogy for this is to compare it to searching for the cheapest loaf of bread.

Individual insurers are like bakers, your choice is simply to buy its cheapest loaf that suits.

Brokers are like supermarkets; they stock a range of bakers' loaves and the price charged depends on their relationships with suppliers.

Screenscrapers are like sending someone round supermarkets and bakers to note all their prices.

If you have an accident and damage someone else's car, but decide to cover the costs yourself, strictly speaking you should still tell your insurer about it.

Many don't, thinking it will increase premiums. But a problem may arise if you have a second accident and it is found to be related to work undertaken for the first. If this does happen it would most likely result in non-payment of the claim, rather than cancelling the insurance or being reported for fraud, but could still end up costing you £1000s.