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Don’t expect your car insurance premium to only rise by a £1 at renewal

20 January 2015

Matt Oliver, car insurance spokesperson for Gocompare.com, comments on the latest AA Premium Index:

“The news from the AA that average quoted car insurance premiums have risen by just £1 will be welcomed by drivers but they will almost certainly be disappointed if they expect their own renewal price to change so little.

“As the AA points out, the car insurance market is extremely competitive and it’s most likely this that has led to premiums levelling out rather than insurers cutting claims costs and passing on the benefit. What customers need to bear in mind is that an insurer which has offered a great deal to win your business will probably want to make some money from you the following year, and then a bit more the year after that. It’s no secret that loyal customers subsidise the best deals for new customers so you can either be on the receiving end of the subsidies by switching regularly, or you can give out the subsidies by staying loyal to one insurer, it’s as simple as that.

“Our own survey* has found that 34% of drivers have not switched their car insurer in the last three years and 17% have never switched. Research shows that just over half of consumers could save up to £234** by switching car insurer.

“Insurers frequently adjust their positions on rates and risks and they quote depending on the kind of customer they want to acquire at the time. That’s why there’s no such thing as a ‘best buy’ car insurance product and another reason why a great deal on your car insurance one year can be expensive the next. Drivers should always compare quotes from a wide range of insurers to ensure that they get the best terms and rates for their circumstances and the easiest way to do that is by using a price comparison website.”

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Notes to editors:

*On 17-18 December 2014, Vision Critical conducted an online survey among 2,011 randomly selected British adults who are Springboard UK panellists.  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.

**Based on independent research by Consumer Intelligence during 1 September, 2014 to 30 September, 2014: 51% of consumers could achieve a saving of up to £233.87 with Gocompare.com car insurance based on a comparison of at least 40 companies.

***According to the RAC report on motoring, as of 2013 there were 30m drivers in the UK. £2.4 billion is based on the 34% of consumers (10.2m) who have not switched car insurer in the last three years. 10.2m x £234 = £2,386,800,000 (rounded to £2.3bn).