Here are our top tips and tricks to find the cheapest cover.
Jump into:
01 NEVER auto-renew. Insurers can't charge existing customers more than newbies, but most can still save by switching
From 1 January 2022, the Financial Conduct Authority, which regulates insurance, banned car (and home) insurers from charging existing customers more at renewal than they would expect to pay when taking out a new policy with the same firm.
This put a stop to a process known as 'price-walking' or the 'loyalty premium', where insurers would lure new customers in on cheap deals and then increase renewal prices each year, even if there had been no change in their circumstances, risk level or property.
But this DOESN'T mean your renewal quote is the best deal. Different insurers have different prices so you should still compare to see how much you could save from switching.
Plus, insurers can still charge a different price via different channels – for example, lower prices on certain comparison sites (provided existing customers who originally came via that site are charged the same). So always try multiple comparison sites.
02 The cheapest time to get car insurance quotes is about 23 days before you need the policy to start
Your renewal notice from your insurer will show the new price for next year (and the price you paid last year). It's usually sent around 28 days before your current policy ends.
If you do nothing, it'll usually automatically renew at that new price, so always have your renewal date in your diary to take action.
The cheapest time to get quotes is 23 days ahead of your renewal date – cover becomes more expensive the closer you get Our analysis of over 70 million quotes from February 2020 to February 2021 showed a policy costs an average of £1,198 a year on renewal day. But 23 days earlier the average is just £694 a year, a MASSIVE £504 difference.
In general, the closer to your renewal date you get quotes, the more of a risk you're deemed to be (we've heard that it can show insurers you're a bit disorganised).
But getting quotes too early, for example, 28+ days out, can also push the average price up – likely as fewer insurers will provide quotes that early.
It worked for these MoneySavers...
"Renewed three weeks early after your tip. It's gone from a renewal price of £108/month to £51/month [saving £684/year]. Checked the comparisons later and it went back to £100. Happy."
Hayley via Twitter
"Just did mine (24 days early) – saved over £690 over my renewal price."
Cara via Facebook
03 Check if you can save by adding a responsible driver to your policy
When getting insurance quotes, it's always trial and error that drives down the price, rather than logic. Plus different insurers respond in different ways, so it's just a case of trying different quotes and seeing what happens.
Here's a trick to try...
Adding an extra 'responsible' driver to your policy
It may seem counter-logical, but covering an extra driver can reduce rather than increase your cost – in some cases by £100s or £1,000s.
If you're a high-risk driver and you add someone who is a much lower risk as a second (or third) driver, they can bring down the average risk and you may get a cheaper policy.
It just needs to be someone who would reasonably drive your car. Here's a good example, but it can work for anyone.
"As I'm a young, new driver my insurer wanted £5,000 but after adding mum and dad it dropped to £1,900."
@Faevouritexox
The better the driving history and lower the risk, the more impact it should have. Adding someone with a good driving record is likely to make the most savings, but anyone who's a lower risk can help.
By law, insurers can't discriminate over gender, but age, experience and driving history can make a difference. Warning: Never add someone as the main driver if they're not. This is known in the industry as 'fronting', and is fraud. If you do it and are caught, you could face a conviction and your insurance will likely be invalid.
Related Articles:
04 See if (legitimately) tweaking your job title can save you £100s
An illustrator is often cheaper than an artist, an editor cheaper than a journalist, and a PA cheaper than a secretary – the job title you choose when taking out insurance can sometimes save you cash.
Small changes to your job description could reduce your costs. Remember, never lie, as this would be considered fraudulent.
If you don't have a job, you face a potential fivefold jump in insurance costs by declaring you're unemployed. The same hikes don't apply to homemakers (housewives/househusbands). If that's you, say so to avoid a hike in costs. However, only enter 'homemaker' if you're genuinely not seeking work or receiving benefits that require you to seek work. Otherwise, it's fraud.
05 Before getting quotes, make sure you're on the electoral roll – it can affect costs
Being on the electoral roll is not just about being registered to vote – it can also make a difference to your insurance premium.
Insurers such as UK Sure have confirmed that they use the electoral roll as part of the ID-checking process to combat fraud.
Not being on the electoral roll, or having incorrect information registered, makes it more difficult for insurers to identify you, so they'll probably give you a higher quote or simply not offer cover.
If you're not already on the electoral roll, it's straightforward to do.
If you have more than one car in your immediate family or household, this could be for you.
For some people, discounts for adding multiple cars could save £100s, or even £1,000s in some cases, but for others it could actually be more expensive.
07 Check if one policy for both your car and home insurance works out cheaper
After you've checked the price of separate cover, it's worth checking if you can save by combining them.
Many insurers offer a discount on new policies to their existing customers. For example, UK Sure offers discounts on your car insurance if you have another policy with them.
What if my home and car policies have different renewal dates?
For many insurers, different renewal dates don't matter as each car and your home will have its own policy and policy number.
The insurer will just give you a discount for each policy you purchase – as long as you let it know you're already an existing customer.
08 For the cheapest policies, you'll usually need to pay annually
A monthly payment plan for your insurance is essentially a high-interest loan, and can vary from under 20%, to over 40% APR. For example, if your premium is £1,000 and you want to pay monthly, you could pay £95/mth, which is £1,140/year (£140 more) at an average APR of 25%.
So pay in full, or if you can't afford it, use a credit card with a lower interest rate (or better still, a 0% credit card for spending, ensuring your repayments are big enough to clear it within a year).
If paying by credit card, check if the insurer or provider charges a fee for doing so – though the fee is usually less than the interest charged on monthly instalments.
Related Articles:
09 Saving from switching is not just for those at renewal – though you may need to factor in cancellation fees
Many assume switching is only for those at renewal. It's not – you can actually switch at any time.
This is important when prices are rising, or if you're someone who recently auto-renewed without doing comparisons to see if you can cut costs.
However, if you are thinking of switching mid-year, there are a few things to be aware of:
If you cancel a policy mid-year and you paid upfront, you'll usually get a pro-rata refund for the rest of the year, providing you haven't claimed. If you pay monthly, you'll just stop paying the old insurer and start paying the new one.
There will normally be a cancellation fee of about £50 (check what your insurer charges), so your savings from switching should outweigh this to make it worth it. The longer you've got to go on your policy, the more likely you'll be better off switching.
You won't earn the current year's no-claims bonus if you switch so you'll need to be making a substantial saving to make this work.
If it makes financial sense for you to switch mid-year, call the old insurer to tell it you're cancelling. Ask if it has a notice period, as this will dictate the date you want the new policy to start.
Then buy the new policy. Make sure the dates align so that one ends on one day, and the other policy starts on the next day to ensure there's no time when you're uninsured. Switching mid-year can save you money.
Comentarios