Insurers are costing UK motorists £1.23 billion every year with expensive auto-renewals on car insurance policies.
Research by Go Compare has revealed a ‘loyalty trap’ that around 4.6 million fell into at their last renewal. These drivers could have saved up to £262 per person if they’d shopped around.
Misplaced loyalty
Nearly a third of the 62 percent who let their policy roll over didn’t query or shop around because of a feeling of loyalty to their insurance providers.
That beats the 22 percent who lacked the confidence to switch, the 15 percent who assumed other insurers wouldn’t be able to compete on price and the 10 percent who couldn’t be bothered because of the hassle.
The lowest earners pay the most
Those who pay for their insurance monthly (and more often than not, therefore, pay more) are 54 percent more likely to allow their policy to continue past renewal.
Drivers from the lowest earnings groups are 38 percent more likely to pay monthly, and in turn will pay out an average of 18 percent more in fees and interest as a result. That’s not even taking into account the costs of letting a policy roll over.
It doesn’t hurt to ask
You can save serious money simply by getting other quotations, going back to your insurer and threatening to leave.
Inflated renewals are a liberty that insurers are often allowed to take. As such, they will often be happy to re-quote on the threat of your departure, just to keep your custom. Loyalty is fine, just don’t let them take advantage of it.
A few tips from Go Compare, condensed by us:
- Don’t accept your renewal quote without checking the price is competitive
- Note your renewal date and give yourself time to check prices
- Check the small print, make sure there are no hidden costs
- If you can only afford monthly payments, consider a low-rate credit card to pay off over the course of a year