It costs us a fortune in petrol, MOT, road tax and repairs but many of us wouldn’t be able to manage without a car. So, it’s welcome news to hear that, incredible though it may seem, the cost of car insurance has fallen by 10 per cent.

An annual fully comp policy would set you back £594.86 if you took it out now, down from £659.53 this time last year. The figures come from the AA, which keeps track of car insurance by shopping around to find the five cheapest quotes and then working out an average.

According to its calculations, this price slash is the biggest since it started keeping records 20 years ago. But before you break out the bubbly, the AA also points out the cost of car insurance is still double what it was six years ago.

And following a European Court of Justice ruling which came into effect last December, it’s illegal for insurers to discriminate by offering cheaper insurance cover to women. As a result, premiums for women have either stayed the same or gone up slightly. That aside, the AA says there are plenty of things we can do to keep our car insurance costs down.

Its main piece of advice is that it really does pay to shop around.

I know hanging on the phone for what seems like hours while you wait to be connected to the various insurance companies can seem like hell but it could save you hundreds of pounds.

Just make sure that by offering you cut-price premiums, they’re not also offering cut-price policy benefits.

Read the terms properly, or ask them to confirm exactly what perks they’ll offer.

For instance, will they provide a courtesy car while yours is in the garage being repaired?

Will they still cover you if you take your car to Europe?

What is the excess on the policy? That’s the amount you’ll have to stump up yourself before they will chip in?

And there are ways to cut the cost by watching your driving.

Stay within the speed limit, so you don’t pick up any pesky speeding points.

Cut your annual mileage if you can and keep your car as safe as possible by parking it off-road, or better still, in a locked garage at night.

It’s not as easy to do that if you live in central Oxford but get around this by fitting car alarms, immobilisers and tracker devices.

As for insuring young drivers in your household, try the Driving Standards Agency’s Pass Plus course. It improves their skills in areas such as driving at night or on motorways and could swing a discount on their insurance.

At the opposite end of the spectrum, anyone on the wrong side of 60 can play the age card. If you are about to, or have retired you’ll probably be doing less miles, so tell your insurer in case it makes your premiums cheaper. See, getting older isn’t all bad.