Summer Budget backs auto renew message

Earlier this year, MoneySuperMarket took to Parliament to campaign against the auto renewal rip-off that sees UK motorists spend a £1.3 billion more than they need to on their car insurance - and it looks like the message is getting through as the importance of shopping around for cover made into yesterday’s Budget policy paper. http://moneysupermarket-3.wistia.com/medias/ug4ez0sdpi?embedType=seo&videoFoam=true&videoWidth=600

What the summer Budget means for motorists

Taken at face value, the summer Budget looked good for motorists – not only were significant changes made to the to the way Vehicle Excise Duty (VED or car tax) is calculated, there was the promise that any revenue made would be put back into the UK’s road network. In addition, new car or motorbikes will not need an MOT until they’ve been on the road for four years - a 12-month increase on the current three-year threshold – and fuel duty has also been frozen. On the downside, insurance premium tax will increase from 6.5% to 9%, meaning a typical two-car family will pay around £35 a year more for their car and home insurance – meaning it’s more important than ever to compare prices to find the lowest price. This is a message that was echoed in point 3.9 of the summer Budget policy paper, which stated: “If people compare the different options available for their insurance they can generally get a much better deal, but many people simply renew with their existing insurer without checking the price they could get elsewhere. The Financial Conduct Authority (FCA) will review what more can be done to ensure that people are encouraged to shop around when they renew their insurance.” And if you want to know exactly why it’s rarely in your best interests to auto renew, check out Kevin’s article Let’s stop wasting £1.3 billion a year auto renewing car insurance.

The MoneySuperMarket manifesto

MoneySuperMarket has put together an eight-point plan to end the auto renew rip-off and put the power and choice back into your hands. And MoneySuperMarket has recently held talks with the FCA to explore ways in which motorists can more easily secure the best deal on their car insurance. We’ll keep you updated on developments.

THE AUTO-RENEWAL MANIFESTO

  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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