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The student masses will soon be heading off (or back) to their uni digs, so news that the Student Loans Company, responsible for all student loans, is struggling with demand is not what the country’s budding scholars were hoping for.

The firm has now taken responsibility for maintenance grants and tuition fee loans from local councils and says that demand is up 17% on 2008.

You can be sure too, that should those students be packing up their own cars to return to their chosen seat of learning, their car insurance premiums will be taking up a hefty chunk of any cash they may have had to cover rents and tuition fees.

With premiums having risen consistently over the last few years, particularly for young motorists, MoneyExpert.com looks at alternative and more cost effective means of car insurance.

Car insurance quotes

Play it by the book

The first thing to bear in mind is that car insurance - unlike home contents or travel insurance - isn’t an optional product. Whatever car you’re driving, no matter what it’s worth, you’re legally obliged to have an insurance policy that at least covers third parties - those involved in an accident with you.

There may be an alarming number of motorists on the road who chose to flout the law and drive uninsured, but the cost to honest drivers of them doing so is roughly £500 million a year according to the Motor Insurers’ Bureau. That’s roughly £30 on the insurance premium of every driver, and the cost to you, if you drive uninsured, could be far greater.

Pay as you go

Most insurers will ask you when you apply for a policy roughly how far you expect to drive in a year. The idea, therefore, of charging you according to your mileage isn’t a totally new one but very few insurers actually go as far as to directly link your insurance premium to the amount you drive. The insurer will fit a Global Positioning System (GPS) device to your car for free, and then be able to track when and, quite importantly, where, you drove in a given month. This information is then used to calculate your monthly bill. Insurers claim that the policy could save you up to 30% on premiums each year if you drive less than 6,000 miles.

Look at all the options

Car insurance, perhaps more than any other everyday financial product, offers a huge range of options – sometimes so many as to put you off wading through the market.

At any rate it can be tempting to narrow down your search options at the earliest opportunity in the belief that you’ll find the cheapest provider more quickly. Many young drivers may be tempted to only search for so-called ‘third party’ cover which is generally perceived as being the most cost effective.

Third party insurance only covers other drivers and vehicles in any accident you may be involved in, but given its popularity among more ‘risky’ drivers, providers have upped premiums for this type of policy.

Consequently, bizarre as it may seem, you may find a cheaper deal if you search for a policy offering more cover comprehensive cover.

Beware the details

As premiums have shot up for young motorists a popular tactic has been for them to add themselves as named drivers to their parents’ insurance policies.

If done correctly, this can be a legitimate way of keeping costs down. You could find yourself in trouble, though, if you are insured as a named driver but are in fact the main driver or even the owner of the vehicle. A student who was listed as a named driver on one of their parent’s vehicles, but had an accident whilst away at university where the car was kept, for example, could find their insurance policy invalidated.

The best option, as ever, is to be as honest as possible with your insurance provider. The potential cost of invalidating your policy will far outweigh any savings you might make in the short-term.

Car insurance quotes