Why You Should Never Auto Renew Your Car Insurance

The new registration plate is due March 17 making it one of the busiest months of the year in the world of car insurance, so let me ask you this….

If I owned a shop and I was selling cans of coke for £150, would you pay over the odds, or shop around?

I’m guessing you’d shop around, so why then when it comes to car insurance do 5.2m Brits allow their insurer to auto-renew their policy without looking for a better deal first?

The mind boggles, even more so when you consider the total cost for doing so was a whopping £1.5 billion more than needed to be spent according to research conducted by Go Compare.

Even worse, 18 – 24 year olds, the age group who could stand to benefit the most from shopping around, are the least likely to do so.

41% out of blinkered loyalty to their supplier, and a further 29% because they feel they lack the necessary knowledge and confidence to seek out a better deal.

Guys, loyalty does not pay when it comes to car insurance!

In this short guide I’ll explain how you can get yourself a better deal.

Pick the right job title

Might seem like a bit of an obvious thing to say, but allow me to elaborate.

Your occupation could be described as a few different things, what’s more, some cost more than others.

For instance, if you state you’re a music teacher rather than just a teacher, you stand to pay £86 more on average.

Construction workers pay more than builders, but builders pay less than bricklayers – all three describe the occupation, yet have very differing costs.

Search through all the different variations in which your job could be described until you find the cheapest one.

Add an experienced second driver

OK, don’t be tempted to step outside the confines of the law here.

It is illegal to state that someone is the main driver of the car when they are not.

However, adding a secondary driver is perfectly legal and could save you a few quid by having them named on your policy.

You must seek their permission first, make sure they have a clean, full drivers license and a good no claims history.

Plan ahead

You can save an average of around £280 on the cost of your annual policy by shopping around for a quote three weeks before your policy is due to expire.

If you’re a younger driver you could potentially save even more.

Take the quote from you current insurer and then look around for a cheaper deal.

Our insurer this year wanted us to cough up £400 more than we found elsewhere, which just goes to show loyalty doesn’t pay.

Pay up front

When I worked in the world of car insurance we were trained to promote paying by the month.

I was lead to believe that a big company prefers regular monthly payments coming into the coffers, rather than a one off payment all at once.

How true that is, is anyone’s guess.

However, one thing is for certain, it costs more to pay monthly.

Usually it is anywhere up to £60 extra compared with paying it all off at once.

Get into the habit of putting a bit away each month so you have the money there when it comes to renewing your policy.

A good way to save for things such as this is by using the Piggybanking technique which you can read more about here.

Increase excess and remove extras

We live in a world where we are always asked “would you like fries with that?”

Ad-ons such as breakdown cover, drivers legal protection, excess insurance, windscreen cover, driving abroad and courtesy cars all increase your premium.

The chances are you are already paying for these add-ons with other financial products you may have.

Current accounts, home insurance, travel insurance and even AA membership can have these extras attached, so make sure you are not paying twice.

Make note of the excess on your policy too, this is the amount you would need to cough up before your insurer pays a penny.

Generally, the lower the excess the higher the policy cost, so make sure you do you sums and work out how much you could afford to pay if you have an accident and need to make a claim.

Increasing the excess by even £50 – £60 could reduce the cost of your premium significantly.

Don’t be afraid to haggle

A skill I picked up from my step dad.

As much as he used to embarrass the be-Jaysus out of me as a kid (finding out the price of a lamp was £45 and offering the shop owner £10 for two being one that stands out), it is something that stuck with me and I rarely take anyone’s first price.

Salespeople, where car insurance is concerned, have wriggle room to haggle, so don’t be afraid to challenge someone’s first price.

They need that sale and you are there ready to buy, that puts you in the drivers seat – excuse the pun!

If you don’t like their offer, politely decline and say you know you can get it cheaper elsewhere.

Leave your number for them to call back in case anything cheaper ‘comes along’.

Cashback deals

Once you think you have got yourself a great car insurance quote, check for cashback deals before you complete the application.

Sites such as Topcashback or Quidco are an Aladdin’s cave of cashback deals.

I know someone who has earned over £10k in cashback from Topcashback alone, so don’t miss out on saving even more money!

What tricks have you got to keep down the cost of your car insurance?

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Why you should never let your car insurer auto renew your car insurance.

Thinking Thrifty

Thinking Thrifty

David Naylor is the editor of the Thinking Thrifty blog. An award winning personal finance and lifestyle blogger, he shows how it is possible to live extremely well for less.
Thinking Thrifty
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