While it’s always good practice to shop around at insurance renewal time, it’s often very tempting just to let your car insurance automatically renew with the same company.
But an investigation by Money Saving Expert (MSE) has discovered that many insurance companies are rewarding loyal customers by hitting them with an admin fee of up to £50 – just for renewing.
Out of 20 major insurers and brokers contacted by the website, nine admitted charging customers admin fees on renewal.
The most expensive admin fee was the £50 charge applied by Budget – but the firm insisted this fee was also charged to new customers opening a policy.
MSE points out that renewal quotes are often more expensive than those given to new customers, so the admin fees are on top of the pricier insurance quote.
One firm, First Central, also applied a £50 admin fee to renewals – but guaranteed that its quotes for loyal customers would be cheaper than those for new policies on a like-for-like basis.
MSE’s managing editor Guy Anker said: “Auto-renewal is often a rip-off, and this investigation shows those who do it often face a double whammy, with extra renewal fees making it even worse.
“This once again proves what we’ve long said – you should simply never auto-renew, but look around to find the best overall deal instead.”
While insurance companies are free to charge admin fees – as long as they can prove they’re proportionate to the work involved – customers haven’t got anything to lose by attempting to haggle over the phone.
Many will be keen to keep a loyal customer so will likely waive admin fees for renewal, and hopefully match or beat the price you paid a year earlier.
This is the list of insurance companies that MSE found to charge admin fees at renewal:
- Auto Direct (owned by Ageas): £25
- Bluefin (owned by Axa): £27.50-£35
- Budget: £50
- Direct Choice (owned by Saga): £10
- Hastings: £20
- Kwik Fit Financial Services (owned by Ageas): £35 (for instalment customers)
- Saga: £20
- Swinton: £25
- Towergate: £10 (for classic cars)