Right now we are in peak car insurance buying season. That’s because on March the first, the new registration comes out so lots of people are buying new policies, or renewing cover from a previous years.
But loads of us risk paying more than we need to, in fact 7.3million drivers admit they renew their policy each year, without looking at the rest of the market - they automatically go with their current provider.
They are each wasting an average £180. Collectively, that’s £1.3billion a year.
More than one in five drivers automatically renew their insurance with their provider. Of these, 14 per cent think they won’t find a better deal and eight percent admit they simply can’t be bothered shopping around to try and save money. In fact, the average driver sticks with their insurer for 2.8 years, meaning they are throwing away literally hundreds of pounds.
So what’s behind this? I’m joined now by Steve Sweeney, moneysupermarket.com’s own car insurance expert. Steve, thank you for coming out in the cold day!
Q1: Why are people failing to shop around for the best deal?
SS: Quite honestly, its apathy. I think as peoples insurance renewals arrive on their mats at home, they should shop around - they maybe able to save a lot of money.
Car insurance prices are increasing in the market place, so they may not be that happy when they do open the envelope, with their renewal. Even if they do get a similar price that they paid the previous year, there could be another insurer out there who wants to their business, so they should really check their price or they may even be able to upgrade their cover as well – for the same price – so shopping around is crucial.
Q2: Do you think people get caught out by the automatic renewal system?
SS: Yes, absolutely they do, because again, its just easy to let that renewal date drift, and think ‘Oh well, its renewed and that’s fine’, but you should always, always check your price online to make sure you are getting the best deal possible.
Q3: So don’t insurers want to keep hold of their existing customers? Why aren’t they offering them competitive quotes?
SS: Well, insurers would love to keep hold of you is the first thing to say, because clearly somebody who stays for the second year is more profitable to that particular insurer, but at the end of the day, its got to be the right deal for the customer, so again there could be somebody out there who really does want your business, it could be a certain insurer who is really really keen in that particular pricing segment, so its absolutely critical that you do shop around.
Q4: And what are your top tips if someone is driving a brand new motor off the forecourt this week, and they want to keep the price of their cover down?
SS: Think about the insurance! It's not the best feeling in the world to think about car insurance prior to buying a car, but at the end of the day, you must think about the insurance first, because how do you know you are going to be able to afford that particular vehicle, prior to insuring it?
FKE: Steve, thank you very much.
So when it’s time to renew your car insurance, what stops you for comparing providers? Is it loyalty? Is it apathy? Do you assume your insurer will give you a good deal?
Whatever your renewal quote when it hits the mat – make sure that you take a look at the rest of the market, to make sure you’re not paying too much for your cover.