Recent figures show that car insurance premiums have increased by almost 6% over the past twelve months from an average of £594 at the beginning of 2007 to £629 in the same period in 2008.

Whatever people decide to do, uSwitch says now is the perfect time for motorists to make sure they are shopping around for the best insurance policy before they buy their new car to avoid any nasty surprises.

Ashton Berkhauer, insurance expert at uSwitch.com, said: “With the new ‘08’ car registration plates due to hit the roads next week, uSwitch.com estimates that nearly 450,000 new cars will be snapped up by eager motorists.

“Buyers have two choices, they can either buy a completely new policy or amend their existing policy. Either way, they could incur a mid-term adjustment fee which is on average £22, alternatively, a hefty cancellation fee charging anything up to 25% of the refund due may apply.

“With insurance costs increasing, it’s no great surprise to see providers offering a flurry of marketing gimmicks to lure in new business. Motorists should not be tempted by these deals unless they have already shopped around and it is the most cost-effective policy for their needs. For example, Tesco Car Insurance is currently offering motorists £50 off their shopping or fuel if they choose Tesco for their car insurance policy. For some people this may represent good value but for just as many it may not.

“At the same time Direct Line is offering to cap premiums for new customers who sign up with them, meaning their premium will not increase when it comes to renewing the policy in the second year. This could be seen as a way of discouraging people from shopping around for better deals, particularly coming from a provider that refuses to appear on price comparison sites.  ust because the cost of the average policy has gone up it doesn’t mean people can’t still get a good deal if they shop around.”