It seems that motorists' pockets are being drained on all fronts as the credit crunch crisis continues to escalate. First of all we saw petrol prices his record highs, enticing many of us to leave our vehicles at home in favour of the far less reliable option of public transport. Then as more of our jobs have been affected and our expendable incomes have been significantly reduced, we have faced other challenges such as meeting road tax payments and keeping up the maintenance of our cars. All this is, of course, very good for the environment as many people are choosing to downsize or to buy second hand instead of new, decreasing production rates and thereby producing less damaging toxins on our planet. However, this steady slowing within the industry, our efforts to save by purchasing less expensive vehicles, both in terms of face value and running costs, will eventually inevitably affect all the other aspects of the car industry, such as insurance. You might not expect the credit crunch to have a direct affect on the cost of your car insurance but due to a complex series of knock on economic effects, the motor industry and all its related enterprises have now been damaged by the recession.

Research has shown that people are most likely to renew their car insurance in the first three months of the year, which means that premiums are usually lower at this time due to increased competition amongst the insurance brokers. Prices usually drop, or at least remain constant without altering for inflation, during the first quarter to attract maximum clientele for the rest of the year. This year, however, for the first time in several years there has been an increase in car insurance premiums during the first quarter. In the first three months of 2009 insurance premiums have gone up by a fraction over 1pc, reports the AA's most recent British Insurance Premiums Index.

In spite of the rising prices, however, it's never been more important to be sure that your insurance is comprehensive and reliable. Many of us rely on our cars in order to get to work every day and if our vehicles were to be stuck in a garage for a number of weeks our jobs might become insecure and our finances irreparably impaired. If your car does indeed affect your earning potential it could well be worth paying more in order to ensure that a courtesy would be provided in the event of a serious crash. If you're facing financial difficulties at the moment you might notice that certain car insurance companies are advertising premiums much lower than the ones you're paying. However, this could well mean that if you were to make a claim then you would be required to pay huge excess waivers in order to get your money. As any expendable income is precious enough at the moment, sometimes it's worth investing more in insurance to maintain a certain level of predictable financial security.