Here's another myth busted for you. Everyone would think, in a recession, prices would remain more or less the same. It's common sense to think inflation signals the economy is picking up. Deflation means we're going down into a deep depression. Except common sense does not play so well in the real world. Take the body shops. They have to carry a stock of parts and pay to keep their skilled labor even though there's less business around. If their business is down but the overheads stay the same, the only way they stay above water is to increase their prices. Why is there less business? Because we drivers decide we can't afford the deductible so we don't have the vehicle repaired after an accident, buy some filler and paint and patch things up as best we can, or if the damage is too great, we throw the vehicle away and buy something else cheap. That means the costs payable by insurance companies will go up. Now add in the rises in the costs of medical treatment and the only way premiums can go is up. How do we know this?

The Insurance Information Institute is supposed to help us ordinary folk understand the complicated world of insurance. It's full of good advice, at least from the point of view of the US insurance industry. Anyway, the Institute has recently released figures confirming the trend. We actually had the cheapest vehicle insurance ever when the economic boom was at its highest point coming into 2007. But, since these heady days of cheap credit, we've been faced with a 12.5% increase in premium rates. At the end of 2007, the national average premium for twelve-months coverage was $795. Currently, the national twelve-month average is $895. Then, in the spirit of always wanting to kick someone when down, the Institute goes on with the encouraging news that these cycles of steady rates and rising rates tend to go in ten-year cycles. This means we can expect premiums to peak around the end of 2013 and then stabilize - don't get your hopes up about any reduction - with inflation seeing the value of the premiums slowly fall.

The unfortunate result is that it's going to get increasingly difficult to find cheap car insurance. Ask any of the Insurance Commissioners who are in place to look after our interests, and you'll hear the advice that comparison shopping is the best way to find affordable coverage. This places importance on sites like this. But even with our help, you will still struggle to find affordable policies, whether minimum liability or wider coverage. So remember, don't pick the insurance policy only on price. Yes, it's important for the premium to be competitive, but look for good service on claims and a sound financial base. If your vehicle is worth less than $1,000, drop the collision and/or comprehensive coverage but increase your liability cover to at least $100,000 for bodily injury, $300,000 total per accident. This may not be the cheap car insurance you want, but it will keep you financial secure should there be an accident.