People looking for a new car insurance policy have been urged to be realistic when it comes to deciding the best level of excess to set.

Opting for a higher voluntary excess level will usually reduce the overall cost of the car insurance premium, but it needs to be kept in mind that this could push costs up in the event of a crash.

According to moneysupermarket.com, Brits have the option of choosing a voluntary excess level of between £0 and £500. Those who choose not to pay any excess are likely to see the annual cost of their premium rise by around £190 in comparison to those that opt for the £500 excess option.

However, while the difference in premium cost is substantial when comparing the two extremes, it drops to just £25 when comparing an excess of £200 and one of £400.

Peter Harrison, car insurance expert at the price comparison site, commented: “Motorists looking to cut costs may assume altering the voluntary excess level to a higher amount will result in a lower premium price. But motorists beware: this isn't always a cost effective option.”

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