Allowing your insurer to auto-renew your car insurance is one of the most common mistakes made by customers who want to save.
Auto-renewal happens when you come to the end of your car insurance deal.
Your insurer will automatically renew your contract with them. Sometimes they’ll even charge you more for sticking with them, even if nothing’s changed on your policy.
Although it’s less hassle to let your insurance roll over for another year, you could be missing out on savings with another provider.
It’s entirely legal for insurers to auto-renew your car insurance contract but by law, they must tell you:
This is all to make sure you’re treated fairly, because it’s in your best interests to see if you can get a better deal elsewhere.
In 2020, almost 6.7 million drivers allowed their car insurance to auto-renew. That means the UK missed out on a collective saving of £1.9 billion.
According to our research, 20% of drivers assumed they would get a good deal this time around because their provider was the cheapest last year.
Other reasons for sticking with the same provider included concern over the hassle and ease of switching (17%).
However, 20% of drivers stayed put because they asked their existing insurer about reducing their payments or taking a premium holiday, due to financial hardship caused by the coronavirus pandemic.
We also asked drivers about the renewal information they received from providers.
Less than half (49%) said they compare their renewal premium with what they paid the previous year, only a third check their renewal papers for any changes to the cover, while just 27% thought about the cover they'd needed for the coming year. This could become an issue if you try to make a claim on your windscreen protection for example and find you’re not covered anymore.
Make sure you stop your auto-renewal before the policy start date if you think you’ll be paying too much – you can use us to compare prices.
If you’d rather stick with your existing insurer, get in touch and see if you can negotiate a better price. Explain that you’re a loyal customer and see what they can do for you.
If they won’t budge on price, tell them to cancel your auto-renewal.
Just make sure you do it in good time – if you let your policy auto-renew you’re still allowed to cancel, but you’ll probably be charged for the time you’re covered by them and an administration fee - even if you’re still in your cooling off period.
It doesn’t take long to compare prices with us instead, and it could save you money.
Most importantly though, make sure you always have valid insurance in place and the right amount of cover for you.
On 23 July 2020, an online survey of 2,061 randomly selected Great British adults was executed by Maru/Blue. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.1%. The results have been weighted by age, gender, region and social grade to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Great Britain. Discrepancies in or between totals are due to rounding.
Department for Transport’s ‘Vehicle Licensing Statistics: (June 2020)’ Quarter 1 (Jan-Mar) 2020 there were 31.7m cars licenced for use on the roads in Great Britain. 21% of motorists auto-renewed their car insurance policy at the last renewal without checking prices. 21% of 31.7m = 6,657,000.
6,657,000 x GoCompare’s average shop around saving of £289 = £1.92billion.