If you own a car, you’ll want to ensure you get the best possible deal on your car insurance when it’s up for renewal, particularly when other household bills are rising sharply.
But don’t leave shopping around for a renewal quote until the last minute – you could save hundreds of pounds a year by getting a quote between 21 and 30 days before your policy expires, according to comparison site Confused.com.
You should therefore make a note in your diary between three and four weeks before your car insurance renewal date to compare prices, as the later you leave it, the more you’re likely to pay. According to the comparison site, waiting until the last minute to renew your car insurance could cost you around £341 more than if you’d done so at the cheapest time.
Contents
- Why is it cheaper to renew weeks before your car insurance policy expires?
- What happens at renewal time?
- Why does the cost of my car insurance often increase at renewal?
- Can I cancel a car insurance policy after I’ve bought it?
- How can I cut the cost of my car insurance premiums?
- Compare quotes from different providers
Why is it cheaper to renew weeks before your car insurance policy expires?
The cost of your car insurance policy is based on risk, and according to insurers, if you leave renewing your policy until the last minute, you’re likely to be considered a greater risk because you’re less organised than someone who sorts out their car insurance in plenty of time.
Also, the majority of annual car insurance policies are automatically renewed with the same provider when they reach their expiry date, but this doesn’t mean you pay the same price for cover. You could find that the cost of your policy will rise, even if you haven’t made a claim, because this is down to wider economic and market factors. Of course, your premium is almost certainly going to increase if your personal circumstances have changed, such as you’ve got a driving conviction or made a claim during the past year.
Whatever your circumstances, though, it’s always worth searching for a better deal, and particularly when the cost of other household bills is rocketing. Insurers may have been banned from charging existing customers more than new ones for the same policy, but some are still finding loopholes that allow them to charge more. Read more about this in our article Car insurance: why loyalty doesn’t pay.
Don’t worry about losing your no claims discount if you move to a different insurer, as you can usually just move this across to your new provider when you switch.
What happens at renewal time?
Several weeks before your car insurance policy is due to expire, you should receive an email or letter from your current insurer detailing how much it’d cost to renew with them. This should also include the amount you paid in premiums last year, and the policy details. If you haven’t received these documents, it’s worth contacting your provider before starting your quote search to ensure you know how much it’d cost to renew with them. You’ll then be able to compare this quote with the quotes you are offered by other insurers and work out whether you can save by moving elsewhere.
Why does the cost of my car insurance often increase at renewal?
This could be for a number of reasons. As with other types of insurance, if you’ve made a claim, the cost of your cover is likely to increase on renewal as the insurer will consider you more likely to make another claim in the future.
The cost may also increase if the number of miles you’re driving per year has risen, you’ve moved to a new house in an area that’s at greater risk of car crime, or you’ve changed where you park (such as moving from a garage to street parking, for example).
Can I cancel a car insurance policy after I’ve bought it?
You’ve typically got a 14-day ‘cooling off period’ from the date your policy starts when you can cancel it, and if you choose to do so, you should receive a full refund, although some insurers charge a small administration fee to cancel a policy within this timeframe. Once this period has passed, there’s no point in canceling your policy as you’ll lose the premiums you’ve paid.
Compare cheap car insurance quotes
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £490* per year.
*51% of consumers could save £490.26 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next four cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from June 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
How can I cut the cost of my car insurance premiums?
There are plenty of ways you can potentially reduce the cost of your car insurance. One of the simplest is by increasing your voluntary excess, which is the amount you’re liable to pay in the event of a claim. Make sure it’s still affordable, however, or you might not be able to afford to claim if something goes wrong. You could also reduce the cost by paying for your policy in a single lump sum, rather than spread across 12 months.
If you can keep your car in a safer spot, this could also reduce your premiums. For example, move it to a garage or driveway, rather than leaving it on the road. Fitting extra security measures such as a tracker in the car or a security camera in case of theft can further reduce your premiums.
You could also try to reduce the amount of time you spend on the roads. The more you drive, the higher your car insurance premiums will be, as the more time on the road gives you a higher chance of getting into an accident, so from an insurer’s perspective, an infrequent driver is relatively low risk. You might want to look into black box insurance too – also known as telematics – which is a special kind of car insurance policy that rewards you for safer driving.
You can read more about the different ways to cut your car insurance costs in our article 10 practical tips to reduce your car insurance premiums.
Compare quotes from different providers
The best way to start cutting down on your insurance costs is to compare quotes from a variety of providers and find out which ones offer the best deals. Don’t automatically renew with the provider you’re currently using, especially if you’ve recently turned 50 – it’s likely that there will be better deals available to you now.
You can use this tool to get started and compare car insurance quotes for over-50s from over 110 providers.
You can also use this tool to compare quotes from providers covering all age ranges.
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