Drivers are being warned not to tighten their purse strings when it comes to purchasing car insurance. The credit crunch has left many feeling worried, and therefore are cutting back on policies they think they do not need.

These warnings came after a study found that nearly half of UK residents are planning to save money by spending less on financial products, whilst 2% are planning to cut their car insurance.

However, the British Insurance Broker’s Association stated that cancelling car insurance policies is not the answer, as it is a legal requirement.

A spokesman stated: “If you are going to review your insurances there are some that you should keep and some that you perhaps don't need.”