This September’s peak car insurance renewal season could be busier than ever – and motorists who let their policy auto-renew rather than checking prices could be out of pocket by up to £289.
Called the auto-renewal ‘loyalty tax’, the number of motorists allowing auto-renewal is actually on the increase.
Research shows the number of auto-renewals has risen 40 percent over the past six months alone, to the highest level since early 2017.
GoCompare is now urging the 6.7 million motorists at risk of paying the car insurance loyalty tax to shop around and check if they could get identical cover for less money.
Lee Griffin, CEO and founder of GoCompare, said: “Our research shows that millions of drivers are not actively engaging with the renewal process this year, potentially leaving themselves hundreds of pounds out of pocket by effectively paying a ‘loyalty tax’.
“We know insurers are helping those in extreme financial difficulty and, in these circumstances, it could be in the insured’s interest to remain with their current provider.
“But drivers who are still paying their premiums really need to shop around this year to see what other insurers are willing to offer them.”
Lockdown saw fewer cars on the road, resulting in fewer accidents and claims which led one car insurer to issue automatic refunds.
This trend has continued since lockdown restrictions eased.
However, warned Mr Griffin, while this may mean some motorists are pleasantly surprised to find their auto-renewal quote coming in cheaper than last year, he still urged motorists to shop around.
“That is the signal that they could probably get an even better deal elsewhere.”
Top tips to get a better car insurance deal
- Never accept your auto-renewal quote, even if it is cheaper than last year, without first checking prices
- Give yourself at least a week ahead of your renewal date to shop around
- Make sure you read the small print of new policies, so it is a like-for-like policy with no excess charges, penalties, exclusions or terms and conditions
For those who are facing financial difficulties and whose car insurance is coming up for renewal, GoCompare has also published some specific advice to help, including guidance from regulator the FCA.
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