POLICYHOLDERS in search of lower premium rates for car insurance may be in luck. Some motor insurers have been trying to undercut the competition by offering lower rates. But the buyer should beware of being misled. Many of these offers, although attractive, have restrictions on who receives the reduced premiums. The Insurance Advisory Services Ltd, for example, will offer an attractive reduction on premiums of 12 per cent for certain clients provided they restrict the cover to two drivers and meet a number of other criteria. The exact same cover provided by Hongkong's Automobile Association for the same client may be as much as $1,000 more in premiums per year. However, should that same client have a no-claim bonus of 60 per cent from a former policy, the Automobile Association offers a comparable, even slightly lower rate. There is no general rule to adhere to. Different insurers devise different ways to beat their competitors. ''The trade secret is to be very selective,'' one former insurance professional said. ''If you are very selective you can make a lot of money out of insurance.'' The prospect is an attractive one for an industry which in 1991 suffered an underwriting loss of $26.81 million. Through offering these specialised policies, some motor insurers can avoid making underwriting losses on their motor accounts. ''Motor insurance is still making a loss,'' conceded Mr Anthony Yuen, Chairman of the Consumer Council's Publicity and Community relations committee. ''But individual companies if they are very prudent can make an underwriting profit.'' Any policy offering reduced premiums may be as good as another but potential buyers are advised to keep a few points in mind. The policy may not be long term. By offering lower premiums, the insurer may attract business for the first year and then perhaps decide against renewing it. The insurer may also use the motor insurance as a window for opportunity: the insurer attracts clients and then attempts to sell other policies such as those in personal lines. But regardless of reduced premiums, buyers should not expect too much. Because motor insurance is tariffed, premiums will never fall below a certain minimum.