Drivers waste £674 million a year letting their insurance auto-renew

Published 10 February 2020

Drivers are being hit with heavy penalties if they don't shop around for car insurance, according to research released today.

Figures obtained by MoneySuperMarket reveal that 41 per cent of drivers let their policy renew automatically in 2019 - more than double the number in 2018.

>> Car insurance premiums set to hit record high

Nearly three quarters of these saw an average premium increase of £40, while one in five saw increases of between £51 and £125. That means drivers could save a total of £674 million by shopping around.

New rules introduced by the Financial Conduct Authority in 2017 require insurers to clearly display new premium prices alongside current ones, alerting drivers of any increase or decrease. Despite this, nearly a fifth of drivers say they'd rather stick with their existing provider because it's easier than changing.

“If you let your car insurance auto-renew you’ll more than likely see an increase in your premiums, with our research showing that the average premium can increase by £40," said MoneySuperMarket's car insurance expert, Dave Merrick.

"Although some of us are shopping around for a better deal, the number of people allowing their policy to auto-renew has doubled in just a year, meaning that even more people are paying a loyalty tax by staying with their insurer."

Comments

Engineer Andy on 10 February 2020

Who says it's all wasted? It may be that many people's existing insurer gives the best value for money in the eyes of the policy holder, which is patently NOT the same as a policy being the cheapest.

Sounds more like a sales pitch for MoneySuperMarket to me.

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hissingsid on 11 February 2020

Allowing policies to auto-renew is just laziness. I stay with my existing insurers, but only after satisfying myself before each renewal that they still offer the best cover and value for my requirements, which they continue to do. For the last three years my annual premiums have actually decreased, so my insurers are not penalising me for my loyalty. The way to save money is to pay annually in full, avoiding charges for monthly instalments. Never ever pay by direct debit. Stay in control by making the annual payments yourself.

Edited by hissingsid on 11/02/2020 at 08:55

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gordonbennet on 13 February 2020

You can see why the govt of the day regards the motoring public as a cash cow, if they have so much money to spare investigating renewal values is too much bother the govt will soon relieve them of it.

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