Typically, paying your car insurance annually offers the best price. Whether it’s better to pay for your premium annually or each month will depend on your circumstances.

Paying an annual lump sum is usually cheaper than paying monthly. A monthly payment plan could mean you pay more as you might be charged interest on the instalments.

The insurance provider will carry out a credit check if you want to pay for your car insurance monthly. Providers will also look at your credit score (a ’soft search’) when you compare insurance quotes, but this is just to check your details and won’t affect your score.

Some insurance quotes last as long as 60 days, but some can change at any point.

When you compare car insurance with Compare the Market, you can save your searches. Remember though, you won’t necessarily get the price that you saved when you come back to buy your policy.

If you cancel your car insurance policy within the 14-day cooling off period, you might have to pay an admin fee but you’ll get a refund minus the days the policy was active for.

If you cancel later on, you may have to pay cancellation fees and admin fees. You may or may not get a refund, depending on the circumstances and whether you pay for your policy annually or monthly.

Car insurance excess is the amount you’ll have to pay towards a claim on your insurance. There are two elements to car insurance excess:

• Compulsory excess – this is set by the insurance provider. You might have to pay an additional compulsory excess if you drive a high-performance car or if you’re a young driver.
• Voluntary excess – this is the amount you agree to pay in addition to the compulsory excess. Agreeing a higher voluntary excess can reduce the cost of your insurance, but you’ll need to make sure you can afford to pay it if you make a claim.

A no claims bonus, also called a no claims discount or NCD, builds up every year you have car insurance without making a claim. You can accumulate up to five years and sometimes more, depending on the insurance provider. Your NCD can cut the cost of your car insurance when you renew. You can also opt to protect it so that it’s not affected if you do make a claim.