Let’s stop wasting £1.3 billion a year auto-renewing car insurance

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Every year in the UK we spend £1.3 BILLION more than we need to on our car insurance, purely because so many insurers set up your policies to renew automatically – and that’s money many don’t have to waste.

How does auto-renewal work?

When you take out car insurance with a new company, you’re often not signing up to a year’s cover, but rather for a policy that will renew every year until you cancel. This has some benefits – for instance you can’t end up accidentally uninsured, which is against the law. However, too many drivers aren’t aware what they are signing up for, or that they are actually signing up at all.

So what’s the problem?

The result is that six million cars now have their insurance automatically renewed every year, without consumers checking a single other quote to see if they can find a better deal. Here’s what we don’t like about how the auto-renewal process works…

You’re not given a choice

When you buy car insurance from an insurer that auto-renews, you’re actually signing up to a contract that will renew year after year after year. Even worse, if you take no action the price you pay will be whatever your insurer wants it to be, and it’s often not competitive compared to what you’d get by shopping around.

It’s confusing

When renewal time comes around, the letter or email from your insurer can be mind-bogglingly confusing. You can’t even compare the price versus last year’s premium, and insurers bombard you with language that discourages shopping around, like ‘YOU DO NOT NEED TO DO ANYTHING’.But the outcome is clear – fail to take action and you could end up paying way too much for your next year’s cover. On average, when insurance auto-renews, that driver misses out on an annual saving of £113.

You could end up not insured in the way you think you are

Some of the renewal letters we’ve seen don’t tell you about important changes to your insurance – such as an increase in your excess (what you pay towards a claim) or the removal of extras like breakdown cover – they rely on you to hunt it out the small print. Ultimately this can leave you under-covered for the next year, and completely unaware.

Even if you realise and want to cancel, it’s hard to find out how

To get out of auto-renewal, you need to tell the insurer you want to cancel (a bit odd when you haven’t even taken out the policy!). However, it is far from simple to do so – insurers who let you renew online don’t let you cancel the same way, and call centres offer restricted hours and charge you for calling. Shockingly, a few insurers actually charge you a fee – up to £25 – to cancel, even if you are within the cooling off period. The crux of the matter is that the power to make sure you’re getting the best value for money has been taken out of your hands by a process that, in the worst cases, misleads  and creates uncertainty – leading to customers staying with their existing insurer out of inertia, rather than choice. Particularly worrying is that our research reveals that older drivers, those with less money, and people not on the internet suffer more than most.

What needs to happen next?

Our report published today shows widespread agreement that change is needed.

In a poll of drivers, over two-thirds agreed that auto-renewals were a bad thing where customers weren’t explicitly asked about it. The same amount of people also worried about auto-renewals resulting in them paying twice for car insurance. It’s no surprise in a nation of savvy deals hunters – both of these can easily result in you shelling out significantly more for cover than you need to. To stop this, we are calling for EIGHT changes to the way auto-renewals work, with ONE clear aim – putting power and choice back into your hands.


  1. You must be clearly asked whether you want to opt-in to auto-renewal when buying the policy
  2. Cancelling auto-renewal should be really simple when you receive your renewal, such as a click-through button on emails or a simple cancellation form sent with the letter
  3. Last year’s price should be displayed clearly on your renewal notice, next to the new price
  4. Any significant changes to policies – such as increases to excesses or removal of breakdown cover –should be clearly displayed on renewal notices
  5. Renewal quotes should clearly include proof of any No Claims Bonus, to enable easy switching to alternative policies
  6. Renewal notices should include a clear warning that the price and cover is only valid if you’re circumstances haven’t changes – such as if you’ve picked up points on your licence
  7. Renewal notices should be in plain English
  8. Once you’ve renewed, you must be prominently told about the cooling off period, during which it should be free to cancel

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