Buying your car insurance three weeks ahead of the renewal day could save you hundreds of pounds a year, an investigation by MoneySavingExpert (MSE) has revealed.
By analysing more than 18 million quotes from January to May, MSE found that the cheapest time to buy is 21 days before the start date, while leaving it to the last minute will leave you paying the highest price. Arranging the cover too early is almost as expensive as leaving it until the day it’s due to start.
This MSE investigation is a game-changer… how buying your car insurance too early or too late could mean you're overpaying by a typical £550+ – we reveal the sweet spot to slash costs by half: https://t.co/lSfL6NED7L pic.twitter.com/9wZJVpYNLc
— MoneySavingExpert (@MoneySavingExp) August 1, 2018
A policy arranged three weeks early costs an average of £589 – a staggering £531 less than buying it a month in advance. Buy on the renewal date the price rises to £1,156 – £567 more than arranging cover at the optimum time.
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MSE founder Martin Lewis said: “Car insurance pricing is based on a mix of ‘actuarial risk’ and which section of the market is being targeted. To find the risk they look for patterns, and we’ve now uncovered that one of those is how early you get a quote before renewal.
“To avoid being a last-minute loser, everyone with car insurance should, at the very least, put a note in their diary 25 days before renewal to sort it within a week.”
Plan ahead to secure the best deal
While there’s no guarantee that the 21-day method will result in the cheapest premium, MSE suggests taking three steps to secure the lowest price.
- Lock in a rate 60 days in advance – two insurers allow you to secure a rate a month in advance, without any obligation to take up the offer.
- Check your renewal price, which is usually sent 28 days before its due date.
- Use a comparison site to find the cheapest quotes.
In June, analysis from Consumer Intelligence revealed that car insurance is getting cheaper, especially for young drivers. The report showed that average bills have dropped to £712 – a 5.5 percent fall in the past 12 months.