Ever noticed how easy it is just to renew your car insurance with the same firm every year? Usually, you don’t even need to lift a finger because the insurance company does all the work for you. It’s called ‘auto-renewal’.
It may sound good, but it’s probably not. Because your friendly, helpful, “let us take care of it for you” insurer will in fact probably take the opportunity to hike your premium, leaving you paying much more than you would if you shopped around.
Auto-renewing could cost you
Based on our research, over a third of motorists still allow their policy to be automatically renewed*. This is often more expensive, and means British motorists collectively waste £652.5 million a year*.
Check your renewal notice
Not convinced? Check your car insurance renewal notice. You’ll see what you paid last year alongside what this year’s price will be, showing you the scale of any premium hike. Don’t be surprised if you’re one of the two thirds of people who see an increase* if you auto-renew.
It may be the first time you’ve seen this information, as insurers have only had to include this detail on renewal notices since April 2017. This change came after we lobbied the government and the insurance industry regulator – the Financial Conduct Authority (FCA) – to change the rules and help cut the money wasted on auto-renewals.
And although less than half of British motorists noticed this information*, the improved clarity around the cost of auto-renewing did encourage over a third to shop for a cheaper car insurance quote.
*47.6% of motorists say they noticed last year’s price on their renewal letter.
Compare car insurance to save
Don’t pay the loyalty tax – shop around to compare car insurance and you could save up to £278.49!* It only takes a few minutes to review quotes from a number of different providers, and you can sort results by price or excess amount.
*51% of consumers could save up to £278.49, according to Consumer Intelligence, February 2018
The results will also show an overview of which car insurance policies include legal expenses, personal accident cover, breakdown cover, windscreen cover and a courtesy car. Where you’d need to pay extra to include this, the price is displayed clearly.
Why do motorists auto-renew their car insurance?
There are a number of reasons why motorists chose to auto-renew their car insurance policy, according to our survey:
- Nearly a fifth (18.76%) were happy with the cost of their insurance
- A further fifth (18.39%) said it was too much hassle to shop around
- 15.25% liked the customer service with their current insurer
- 10.44% said they liked their current insurer’s brand
- 7.49% said they were loyal to their current insurer
More tips to save
Not auto-renewing your policy is one of the quickest ways to save on your car insurance premium. Other tips include increasing your voluntary excess, being accurate about your expected mileage and paying annually. See more car insurance money-saving tips.
*34.8% of motorists allow their policy to be renewed, and 66.9% saw their premiums rise as a result (Based upon MoneySuperMarket’s OnePoll research survey of 2,000 UK adults with a valid driving licence from 8 to 12 February 2018)
*Based upon MoneySuperMarket’s OnePoll research survey of 2,000 UK adults with a valid driving licence from 8 to 12 February 2018.
*Motorists reported an average increase of £50 per policy based on OnePoll research of 2,000 UK adults versus the number of adult drivers in the UK (£652.5 million a year)