- 36% of drivers have now been with the same insurer for 3 years or more
- UK drivers potentially missing out on up to £2bn worth of savings*
- Less than half (46%) of drivers check last year's premium when renewal arrives
New research by Gocompare.com reveals that millions of motorists could be over-paying to the tune of almost £2 billion a year for their car insurance, simply by allowing their insurer to automatically renew their policy.
September is traditionally one of the busiest months of the year for car insurance renewals as historically the new registration plate results in a significant turnover of new and used cars at this time of year.
However, 8.2 million UK drivers simply rolled-over their last car insurance policy**, potentially missing out on savings of up to £222.66***
The survey found that on average, UK drivers have been with their current insurer for three years and 37% of drivers have now been with the same insurer for three years or more.
Worryingly, only 46% of drivers say they checked last year's premium to see how it had changed at renewal and less than a third (31%) checked their renewal documents for any changes to the cover.
The main reason given for sticking with an insurer was that they were the cheapest last year and hopefully that meant they would be good value again this time (36%). While 26% put it down to loyalty, saying that their insurer had always looked after them in the past.
Other reasons why drivers auto renew their policies include:
- Too much hassle, even if they can save money - 21%
- Don't want to change existing Direct Debit - 18%
- Existing insurer was good with a claim in the past, so stuck with them - 12%
- Car insurance confusing and lack the confidence to switch - 8%
- Worried that they will lose their no claims discount - 8%
Of the 65% of drivers who didn't allow their car insurance to roll-over at their last renewal, 40% wanted to find cheaper cover and save money and 44% didn't trust their insurer to give them the best deal year after year. 32% believe they get a better deal as a new customer.
Lee Griffin, of Gocompare.com Car Insurance, commented: "September is always a busy time for insurance renewals and while not everyone will be changing their car this year, there will be millions of renewal notices already sitting on the nation's coffee tables and 'to-do' piles. Now is the time to be shopping around to try and get a better deal as many insurers will happily renew your insurance automatically unless you contact them to tell them otherwise.
"Looking at our research, millions of drivers are potentially overpaying for their car insurance to the tune of nearly £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, loyalty counts for very little when it comes to insurance and many drivers would be better off switching rather than sticking with the same insurer.
"In their renewal letters, insurers will focus on the convenience of needing to do nothing at all in order for your insurance to continue. However, with rates reducing in recent years there can be good reasons to switch. Three years is a long time in car insurance and the chances that an insurer was the cheapest at the top of the market and still good value now are pretty slim. So if you have been with the same insurer for a number of years, it is well worth using a comparison site to check your renewal price against the best in the market today.
"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 cancelation charge when you realise you've got two policies in force."
For more information on auto renewals, read Gocompare.com's guide: - http://www.gocompare.com/car-insurance/auto-renewal/
Notes to editors:
On 20 August 2014 an online survey was conducted among 2,001 randomly selected British adults age 18+ who are also Springboard United Kingdom Community members. The margin of error-which measures sampling variability-is +/- 2.2%, 19 times out of 20. The results have been statistically weighted according to the most current data on age, gender, region, and education from the most recent census data, to ensure the sample is representative of the entire adult population of the UK. Discrepancies in or between totals are due to rounding.
*8.2m drivers who auto renewed their last policy x £222.66 = £1.825bn
** There are an estimated 28,420,877 motorists in the UK (Source - Department for Transport vehicle licencing statistics). 29% of car drivers auto-renewed their car insurance at their last renewal which = 8.2m drivers.
*** Based on independent research by Consumer Intelligence during 1st June 2014 to 30th June 2014 51% of consumers could achieve a saving of up to £222.66 with Gocompare.com car insurance.