26th August 2015
British drivers are wasting up to £1.2bn each year by allowing their car insurance contracts to automatically renew rather than shopping around for a cheaper deal.
The study by GoCompare.com, the price comparison website, found that 5.8 million motorists a year fall into the auto-renewal trap.
Half of all drivers don’t bother to check last year’s premium to see how it has changed, and 31% of drivers have been with the same insurer for three years or more.
On average, UK drivers have been with current insurer 3.3 years.
September is traditionally one of the busiest months for car insurance renewals due to the high volume of new car sales.
When asked why they allowed their car insurance to renew automatically 39% thought that because their provider was the cheapest last year, they would be good value this time around too.
Other reasons for sticking with the same provider included loyalty (24%), a good experience with a past claim (11%) while 5% said that they weren’t confident enough to switch, finding car insurance too confusing.
The survey also questioned drivers about the renewal information they receive from providers, revealing that many drivers find renewal letters tricky to understand and lacking key information.
Nearly one in four said that insurance companies use underhand tactics to get you to renew with them.
Matt Oliver, from Gocompare.com, says:“New registration plates are issued in March and September, making them the busiest months for car insurance quotes and renewals. The car insurance market is fiercely competitive and insurers often offer better deals to new customers than for those renewing existing policies.
“So, our advice is simple – even if your current insurer offered the best deal last year, you shouldn’t automatically assume that they will when your policy comes up for renewal.
“Use your renewal letter as a prompt to take action. Look at your renewal notice as soon as it arrives. Compare the price and cover against last year’s documents, consider any changes you might need to make to the cover and take a look at similar policies on a comparison site to see if you can make any savings.”
He says that 51% of customers could save up to £208 using the website.