Broker Kwik-Fit is moving away from the personal lines motor market and focusing on commercial vehicle and household business due to increasing pressure from direct writers.
Martin Oliver, managing director of Kwik-Fit, said: "The comparative spend by the direct writers on marketing and advertising when rates continue to decrease is astounding.
"We predict £160m will be spent on TV and press next year, which is 40% to 45% up on previous years.
"To spend £200 to £250 on acquiring every new customer is unbelievable. We are not prepared to play that game."
Kwik-Fit now plans to pick up business in the commercial vehicle and household lines, where underwriting discipline is tighter.
The broker, which was bought by French private equity firm PAI in June, is understood to have been brought under strict financial control as the investor attempts to squeeze profitability from the group.
Oliver added: "It is surprising that such a tight market still attracts new entrants like Easymoney and Swiftcover.
"The big three - Aviva, HBOS and RBS - are involved in a battle for market share and we see greater opportunities for profit elsewhere."