So, you’re slowly approaching the due date of your car insurance renewal. Most drivers in this situation tend to auto-renew purely because it’s easier to do so. Plus, loyal customers get the best deals, right? Well, as it happens, that’s not necessarily true. In fact, drivers across the UK are paying hundreds of pounds more than they need to, simply because they renewed their current policy instead of looking further afield.
We’re going to take you through seven reasons why you should avoid renewing your car insurance. We’ll also offer up a few tips along the way to help you save money and get the best insurance premiums possible.
1. Loyalty isn’t always rewarded
One of the reasons that drivers tend to stick with their car insurance provider is simply due to loyalty. It’s natural, after all, to assume that prolonged loyalty will lead to a reward further down the line. Unfortunately, when it comes to car insurance, loyalty simply won’t pay off.
According to a famous Meerkat, 51% of consumers in 2018 could have saved up to £247.29 had they looked elsewhere for insurance, rather than simply auto-renewing with their current provider. Indeed, whilst it might seem easier to continue on with the same insurer, it could end up costing you hundreds of pounds.
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*51% of consumers could save up to £253.08 on their annual car insurance premiums. Consumer Intelligence, July 2021.
2. New customers get the better end of the stick
Whilst drivers sticking with the same insurance provider usually get lumped with the same high premiums as the year before, new customers get the cream of the crop. You might notice, for example, that the exact same policy you’re on will be drastically cheaper when offered to a new customer.
With loyalty guaranteed from most customers, insurance providers instead look towards luring in new customers, rather than rewarding their current ones. One of the ways in which they do this is by offering them much lower premiums. This is why it’s in your best interest to look elsewhere before you renew your current car insurance policy. As a new customer, you could take advantage of much cheaper deals.
3. You can always find a cheaper deal elsewhere
When you first decided to choose your current insurance provider, you might have done so in the knowledge that they were charging the lowest premiums around. Now, however, it could be a completely different picture. Insurance rates are always changing, which means you shouldn’t ever depend on old knowledge to dictate where you look for your next car insurance policy.
Your best bet is to look around and see what else is on offer, before you decide to commit to your current insurer for another year. Rather than spending hours looking at individual providers, you might find it more efficient to make use of the many car insurance comparison websites available. Examples include:
Convinced you’ve got bags of time to look for another insurance provider? That might not necessarily be true! Timing is key when it comes to car insurance. According to Compare The Market, drivers could save an average of £506.97 if they switch their provider three weeks before the renewal date. If you want to get the best deal possible then, you’ll want to avoid dragging your feet.
MoneySuperMarket gives you lots of clever ways to save a lot, by doing very little; you can compare and save on over 40 products, from over 55 of the biggest insurance providers in the country.
4. Car depreciation can work in your favour
In case you weren’t already aware, all brand new cars immediately start to lose their value the moment you start driving them. It’s one of the reasons why some drivers opt to buy a used car, rather than a new one. When you spend thousands of pounds on a new car, it can end up decreasing in value by at least 40% after a year. In most cases, this depreciation is something to be loathed by drivers—except, of course, when it comes to car insurance.
As your car depreciates, so too could your premiums. If your car has decreased in value, an insurance provider might not see it as risky to insure. As your car is no longer brand new, its parts might not be as expensive to replace. If it’s been more than a couple of years since you bought the car, its popularity might also have waned—making it less of an appealing target for thieves.
5. There are always ways to reduce premiums
If you were in a rush to pick an insurance provider after passing your driving test, you might not have realised that there are countless ways you can reduce your insurance premiums and make them easier to stomach. In fact, if you play your cards right, you could reduce your premiums by hundreds just by using some of our nifty tricks. Let’s take a look at some, shall we?
- Add a named driver. If you add an experienced driver with a good driving history to your policy, you might be able to drive down your premiums.
- Opt for a telematics policy. If you’re a good driver, picking a black box policy could reduce your premiums. Of course, if you’ve got a few bad habits, your premiums could skyrocket.
- Accept a higher excess. Your premiums could be reduced if you choose to pay a higher excess. Bear in mind, however, that this could backfire if you do end up needing to make a claim.
- Increase your security. By adding the right alarm and immobiliser to your car, you could prove to an insurer that your car is less likely to be stolen—reducing the chances of you needing to make a claim. Find out more with PassMeFast’s top 10 car security accessories.
It doesn’t matter if you’ve decided to look elsewhere for your car insurance, or if you’ve chosen to stand by your current provider, you can still reduce your premiums by hundreds of pounds as long as you’re smart about it. You can find even more handy tips if you head on over to our top insurance guides:
6. It doesn’t take long
As we’ve said, many drivers choose to renew their current insurance policy simply because it’s ‘easier’ to do so. In other words, it takes far less effort to let your insurance auto-renew than it does to look at other providers. The main issue with this, however, is that it’s not necessarily true.
If you make use of the car insurance comparison websites we’ve listed, the process of finding a cheaper insurance policy will likely only take you an hour. (If you’re interested in driving your premiums down as far as they can go, it may take you a bit longer.) So, weigh it up. Do you want to pay hundreds of pounds more than you need to for your insurance, simply because you can’t be bothered looking elsewhere? Or, do you want to spend a short amount of your valuable time looking for a cheaper deal?
7. Looking doesn’t mean you have to jump ship
Whilst we’d advise all drivers to look at alternative insurance providers before renewing their current policy, that’s not to say that it’s always better to switch. Just because you’ve had a look at your options, it doesn’t mean you have to actually take the plunge and switch. If you’re not 100% sure about changing providers, why not try haggling with your current insurer? You might be able to negotiate a slightly better deal.
Even if you decide not to haggle, you could still make a dent in your premiums by following our tips, e.g., adding a named driver, tweaking your job title and increasing car security. Of course, if your provider is being particularly stubborn, and your premiums are still eye-wateringly high, you can cancel your policy and enjoy lower premiums elsewhere as a new customer.
MoneySuperMarket is a 100% independent car insurance comparison site, and they are on your side; that is why they use their own money to provide cheaper prices on a range of even policies, so you can save even more.
1. When is my car insurance due?
It depends on your insurance policy. Typically speaking, your car insurance will usually last you a year. It’s important that you keep an eye on the expiry date, as otherwise, you could end up driving without any insurance cover.
2. What’s auto-renewal?
Each year, you have to make sure you renew your insurance policy before it expires. If you opt for an auto-renewal, however, your insurer will automatically roll it over onto a new year.
3. How do I know if my insurance policy has expired?
For starters, check through your emails to see if you have any records of your insurance policy—you’ll probably be able to find the start and end dates. If your search comes up short, get in touch with the insurer directly.
4. My car insurance has expired. What should I do?
Sort out a new insurance policy ASAP! It is illegal to drive without at least third party insurance cover in place. So, unless you fancy paying a fine or receiving penalty points, it’s in your best interest to buy a new policy immediately.
5. Do I need insurance if I’m not using my car?
If you’re not using your car at all, then you’re just wasting money by paying for insurance and vehicle tax. Your best option is to apply for a Statutory Off Road Notification (SORN). If, on the other hand, you still use your car every now and again, you will need to continue insuring and taxing it.
6. Can I switch insurance providers before my renewal?
Yep! You don’t have to wait until your year is up. If you see a better deal elsewhere, it is possible to switch over. Bear in mind, however, that you’ll usually have to pay a cancellation fee to do so.
7. How far in advance should I sort out my insurance?
The sooner, the better! According to MoneySavingExpert, the cheapest time to buy your insurance policy is around 21 days before the start date. The early bird gets the worm indeed!