How drivers could save an average £300 on insurance premiums
Comparethemarket.com looked at how switching near the end date of a policy affects quote prices.
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Your support makes all the difference.Drivers could save more than £300 on average by switching 20 days before their policy is due to end compared with on the renewal date itself, analysis has found.
On average, car insurance policies are £306 cheaper if drivers switch policies 20 days before their renewal date compared with on the day their policy ends, according to comparethemarket.com.
Finding a new deal on the day the policy ends costs £707 on average, the website found, compared with £401 for someone switching 20 days before.
The price tends to creep up the closer the renewal date gets, with a policy typically costing £431 two weeks before, £506 a week before, and £617 the day before a policy expires, the website found.
Around a third (32%) of quote comparison inquiries are made the day before a policy ends or on the end date, comparethemarket.com said.
More than half (58%) look to switch within one week of their policy ending.
While motor insurance has typically been cheap at the start of the year, 2022 could be different
Traditionally, the cost of insurance is often cheaper at the start of the year due to discounts offered by insurers.
Insurance pricing is based on various risk factors, including annual mileage, the make and model of the vehicle, and previous claims history.
Average premiums are also normally around £50 higher in December than during the rest of the year.
However an insurance pricing shake-up will take place at the start of 2022.
The Financial Conduct Authority (FCA) is introducing new rules in January, preventing insurers from offering existing customers higher quotes than new ones for car and home insurance.
The move is expected to save consumers £4.2 billion over 10 years overall.
It will bring an end to the “loyalty penalty” paid by loyal customers whose prices creep up annually – but it could mean that regular switchers struggle to find ultra-cheap deals.
Fewer cars on the roads during lockdowns, and reforms around personal injury claims, have helped to keep car insurance premium costs down recently.
Comparethemarket.com director Ursula Gibbs said: “While motor insurance has typically been cheap at the start of the year, 2022 could be different.
“With a major regulatory rule change fast approaching, the cost of insurance could increase significantly next year. If your policy is due to auto-renew in the next few weeks, you may be better off switching sooner rather than later.”