Why you should never let your insurer auto-renew your car insurance policy
One of the easiest ways to spend money unnecessarily and unknowingly is through automatically renewing your car insurance policy. In 2019, 5.2 million UK motorists fell for the car insurance auto-renew trap – costing them a massive £1.5bn in the process.
Young drivers in particular, who potentially have the least to spend and the most to save, are auto-renewing their insurance due to a mixture of low confidence in understanding how insurance works and misplaced loyalty to their current insurer. Taking this route when discussing their renewal price means they are paying much more than they could if they shopped around.
Loyalty doesn’t always pay
Car Insurance Policy Premiums have reached record highs, making it more important than ever to do some research to make sure you are getting the best deal when it comes to renewing your policy.
Your current insurer will offer to auto-renew your cover when your policy is coming to an end, often using it as a selling point as it appears the easiest option, with the least effort required on your part. However, what they fail to mention is that you could find the same cover for cheaper, by shopping around and looking at other insurance providers.
The rule of thumb when it comes to insurance is that loyalty generally doesn’t pay and the best deals pretty much always go to new customers.
Tips to save on your car insurance
Be careful what you put as your job title
Unbelievably, there are some job titles, for one reason or another, insurers are not keen on. For instance, if you describe your job title as ‘chef’, you will pay on average £98 more than if you choose kitchen staff as the option.
Construction workers can find themselves paying more than builders, and so can bricklayers! With this information, it’s not so hard to see why 18 – 24-year olds lack the confidence to seek out a better deal!
If your job title can be covered by more than one category, check them all out to see which one is giving you the cheapest option.
Add an experienced driver if possible
Just to be crystal clear on where the law lies with this, it is illegal to claim somebody is the main driver of the car if they are not, so don’t be tempted to step outside the law to save a few quid.
However, adding a secondary driver is perfectly legal and could save you money on the cost of your premium.
You must seek their permission first, ensure they have a clean driving license, and preferably have a decent amount of no claims.
Don’t wait until the last minute
Shopping around for a new car insurance quote around three weeks before your insurance is due to expire, instead of leaving it until the last day, will save you over £200 on average.
Shop around and do a few comparisons before accepting your current insurance provider’s auto-renewal quote. Price comparison sites such as moneysupermarket, confused.com, and go compare can help you with finding the best deal.
Pay in full if you can
Many car insurers will charge you interest on your monthly payments if you spread the cost.
You can expect to pay anything up to £60 a year more by spreading the cost of your car insurance, so if at all possible save a bit every month over the course of the year and pay it all in one go.
Increase your excess and cut out the extras
When buying your car insurance, it is likely that the insurance company will offer you a whole host of extras and add-ons with your main policy such as breakdown cover, driver’s legal protection, excess insurance, windscreen cover, driving abroad, and a courtesy car if anything happens to your vehicle.
Before you buy these add-ons, CHECK you don’t already receive these perks elsewhere such as from your current bank account, home insurance, travel insurance, or even an AA membership. This will ensure you aren’t paying twice for the same service.
Also, take note of any excess charges there are on the policy and how much you would have to pay if you had to make a claim.
Generally speaking the lower the excess, the higher the premium, so do your sums and work out what you could realistically afford should the worst come to the worst and you need to make a claim.
Increasing the cost of the excess by even as little as £50 – £60 could have a significant difference in the cost of your overall premium.
And don’t be embarrassed to do it! If you have called to receive your quote, it is likely the salesperson on the end of that phone will have an income target and in some cases a policy target too.
You have nothing to lose by speaking to your current insurance provider and explaining that what they are offering you is no longer the cheapest deal. The best-case scenario is they will offer you a better-priced insurance policy and the worst-case scenario is that they don’t, in which case you will still be saving money by moving to a different provider. It’s really a win-win!