Don’t overpay for car insurance upon renewal

Five million UK motorists could overpay for their car insurance this year by as much as £1 billion and they'll have no idea how much they could be saving, according to new research from car insurance comparison site Gocompare.com.

The research, commissioned to mark one of the busiest times of the year for car insurance renewals, found that 19 per cent of drivers simply read and file their insurer's renewal quote without comparing it against any competitors, either by phone, on the internet or by using a broker. This could lead to them spending a massive £1 billion more for their insurance this year than they need to.

With 48 per cent of drivers either dreading receiving their renewal quote or fearing that it will have increased, not comparing your renewal quote could be a very costly mistake which plays right into the hands of insurers.

While 69 per cent of drivers agree that insurers give a better deal to new customers rather than those who renew, 27 per cent say they don't compare their renewal quote because their insurer was cheapest last year so they will be the cheapest again this year.

Hayley Parsons, CEO of Gocompare.com said: ‘Our experience shows that insurers almost always offer more attractive quotes to new customers than they do to their existing clients and it is encouraging to see this message is gradually getting through. However, hundreds of thousands of motorists still mistakenly believe that because their insurer gave them a great deal in the past they are bound to still be competitive now. The idea that one insurer will remain the most competitive from one year to the next or that customers will be rewarded for their loyalty couldn't be further from the truth.'

When cash strapped consumers were asked what annual saving would tempt them to switch to another insurance company, 27 per cent said they would switch if they could make any saving at all and this increased to 81 per cent of respondents who would switch if they could save up to £75 per annum. The latest figures from Gocompare.com show that their customers saved an average of £207 per year by comparing their renewal quote online.

The research also revealed that motorists are concerned about some of the tactics used by insurers to get them to stay when their insurance comes up for renewal. 17 per cent felt under pressure to renew their insurance when they got their renewal forms through and 43 per cent agreed that insurers could make it clearer how much their renewal premium had increased compared to last year.

Ms Parsons continued: ‘Very few renewal notices show what you paid for your insurance last year because your new premium may have gone up. Insurers don't want to spell this out for you in black and white in case the increase prompts you to compare your renewal quote against their competitors. However, this is exactly what you should do because expensive renewal quotes have no place to hide on a comparison site. At the very least, shopping around will enable you to see how your renewal quote compares with a much wider range of policies.'