Car insurance renewals

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What Car? Staff
20 Aug 2012 10:17 | Last updated: 14 Jun 2018 00:03

Dont delay when your renewal falls due
car insurance up for renewal? For many of us, that means jotting something on a to-do list, resolving a dozen times to get it sorted but never getting round to it, and then finally flying round like a mad thing trying to get it done and dusted a few hours before your current policy expires.

Human nature. But delaying renewal could prove costly. Research by MoneySupermarket suggests waiting till the last minute to renew, instead of nailing it a couple of weeks beforehand, could cost you 33 or more.
The reason? Simple market economics. As soon as you tell potential insurers, via your quote request, that you want cover to start immediately or the next day, theyll push the price up. They know youre getting antsy and are probably less likely to keep shopping around.

Think about it this way. How much would you expect to pay for a Christmas tree just before the big day compared to the first week in December?

Our number crunchers drilled into 13million quotes run on our site and discovered that theres a difference of up to 7% on premiums if car insurance is bought with more than two weeks to go, compared to the day of renewal itself.

So, a fortnight before renewal, the average driver will pay 434 for a years car insurance. If they waited until a week to two weeks before renewal, theyd see the price go up to 448. A week before theyll find themselves paying 452 while, on the day or renewal, their premium will be 467.

According to the stats, 55% of us only start shopping around for car insurance when there is less than week to go before our existing policies end. A whopping 40% of people leave it until the last day.

Only 33% of us are sufficiently well organised to start thinking about renewal with more than two weeks left on our policies.

Early bird
Our car insurance expert, Peter Harrison, said: 'Our analysis clearly shows that when it comes to renewal time, the early bird really does catch the worm, with renewal premium prices likely to be lower.

'Whats more, those who do leave it to the last minute are often viewed by some insurers to be a greater risk so they will price accordingly they just conclude that you might be a last-minute kind of person in all aspects of your life, and thereby more likely to make a claim.

'Planning ahead is key to making significant savings on your car insurance as insurers tend to change pricing daily. Many do allow you to lock in your quote for 30 days, leaving you free to continue shopping around.'

Always shop around
Tackling the renewal early should never mean just allowing your current insurer to do the job for you. If you allow the policy to automatically roll over in this way, the strong likelihood is that youll pay much more than if you shopped around. This is because insurers usually keep their best prices for new customers.

In other words, you wont be rewarded for loyalty. But if you shop around, youre making yourself a new customer and accessing the best prices.

So the message is clear: done auto-renew with your current insurer, and start your quest for quotes a month before your renewal is due.

We reckon that if we all ran our renewal quotes as early as possible, the UK collectively could save 500 million a year.

This article has been researched and written by whatcar.com's car insurance partner, MoneySupermarket