Five million motorists will waste up to £1 billion this year by renewing their car insurance without shopping around for a cheaper quote.
According to new data from price comparison site Gocompare.com, 69% of drivers agree that insurers reserve their best deals for new customers, yet one in five still accept their insurer's renewal quote.
The findings are made all the more remarkable when you consider that almost half (48%) of all motorists say they dread receiving their renewal quote or fear that it will have increased.
Only one in four say they don't compare their renewal quote because their insurer was cheapest last year so they will be the cheapest again this year.
Switch and save
Interestingly, 27% of cash-strapped motorists are willing to switch insurers if they can make any saving at all, rising to 81% if savings exceed £75 per annum.
Figures from Gocompare.com show that customers saved an average of £207 per year by comparing their renewal quote online, while rival Confused.com points to a similar figure of £208.
Clearly insurers are making a killing by preying on your inertia, or in other words, they are essentially punishing you for your loyalty by offering you an expensive renewal quote.
So next time your policy is about to expire, make sure you take the time to shop around. Both you and your bank balance will be glad you did.
Tips to save more money
With rising personal injury claims expected to drive up premiums further this year, you need to do everything you can to keep money in your pocket.
To help you on your way to cheaper cover, we’ve compiled a list of money-saving tips.
Shop online: Insurers offer hefty discounts of up to 20% when you buy your cover online. Just make sure you fill out your application form carefully, as small errors can be costly to fix. For example, many insurers charge an ‘amendment fee’ of up to £25 just to correct a spelling mistake in your name or address on the policy.
Add a partner: Younger drivers can dramatically reduce their premiums by adding an older driver to their policy. According to moneysupermarket.com, doing so can save you over £280.
Live a life of excess: You can further reduce your premiums by increasing your voluntary excess. Provided you can afford it, moneysupermarket.com estimates you will save an average of £55 by increasing it from £100 to £500.
Pay up front: When you buy insurance, you will be given the option to pay for the year’s cover up front, or by monthly instalments. While the latter may be tempting, it’s also far more expensive, as most insurers will charge you an obscene rate of interest on the outstanding debt (often above 20%).
If you can’t afford to pay for your cover up front, you can always put the policy on a credit card that charges no interest on new purchases for a year, such as the Capital One Platinum credit card, and pay that debt off monthly.
