Nearly half of those sticking with the same insurer believe that a low premium last time means a low premium this time too.
March 1st brings the release of the new ‘14’ registration plate and with it being the busiest time of the year for car insurance quotes and renewals. However, new research by Gocompare.com reveals that millions of motorists could be over-paying to the tune of £2 billion a year for their car insurance simply by allowing their insurer to automatically renew their policy.
8.8 million drivers rolled-over their last car insurance policy without checking for cheaper premiums**, missing out on savings of up to £238.51***
The survey found that 31% of drivers have stayed with the same insurer for three years or more and nearly half (46%) of the 8.8m drivers who allowed their cover to automatically renew did so in the belief that because their insurer was cheapest last time they were bound to be good value this time around too.
Other reasons why drivers auto renew their policies include:
- Loyalty to an insurer which has ‘always looked after them’– 26%
- Too much hassle, even if they can save money – 18%
- They find car insurance confusing and lack the confidence to switch – 6%
- Worried that they will lose their no claims discount – 6%
Of the 66% of drivers who didn’t allow their car insurance to roll-over at their last renewal, 52% wanted to find cheaper cover and save money and 40% didn’t trust their insurer to give them the best deal year after year. 28% believe they get a better deal as a new customer.
On receiving their renewal documents 52% of motorists check their renewal premium to see how much it has changed and then use a comparison website to generate quotes from competitors. 19% telephone a selection of insurers or visit their websites to get alternative quotes and 4% call or visit an insurance broker and ask them to take care of it for them.
Lee Griffin, chief operating officer at Gocompare.com commented: “Millions of drivers are potentially overpaying for their car insurance to the tune of £2 billion a year in the mistaken belief that an insurer offering the cheapest premium one year is bound to offer the same good value the next. However, what many drivers have found is that insurers often offer the sweetest deals to new customers whilst pushing up premiums for their existing customers. Switched on motorists know that when it comes to car insurance, loyalty seldom pays.
“Insurers typically send out renewal notices two to three weeks before a policy is due to come to an end and you should use this time to shop around to see if you can get a better deal. Many insurers will automatically renew your insurance unless you contact them to tell them otherwise and their letter will focus on the convenience of needing to do nothing at all in order for your insurance to continue. There’s no doubt that it is convenient as long as you’re happy to proceed without first checking if your new premium is still competitive. Insurers review their pricing regularly for different risks so there’s no such thing as a ‘best buy’ car insurance policy which will be the best value year after year. Comparison sites like Gocompare.com enable you to quickly and easily compare a wide range of car insurance policies and prices to ensure you’re getting the best deal for the cover you need.
“If you do decide to switch insurers to save money, don’t forget to contact your old insurer in good time to advise them that you wish to cancel your policy when it expires. If you don’t get in touch they may renew your policy using an existing direct debit and you could face a cancellation charge when you realise you’ve got two policies in force.”
Notes to editors:
On 20th February 2014, Vision Critical conducted an online survey among 2,000 randomly selected British adults who are Springboard UK panelists. The margin of error—which measures sampling variability—is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.
*8.8m drivers who auto renewed their last policy x £238.51 = £2.098bn
** There are an estimated 28,420,877 motorists in the UK (Source – Department for Transport vehicle licencing statistics). 31% of car drivers auto-renewed their car insurance at their last renewal which = 8.8m drivers.
*** Based on independent research by Consumer Intelligence during 1st December 2013 to 31st December 2013 51% of consumers could achieve a saving of up to £238.51 with Gocompare.com car insurance.