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Auto-renewal car insurance costing drivers £240 a year

Published 27 August 2019

Motorists are overpaying an average of £240 a year for car insurance by allowing their policy to automatically renew. 

Research by GoCompare reveals that at their last renewal, 4.1 million drivers let their insurance continue without finding out if they could get the same cover cheaper.

September is traditionally one of the busiest month for car insurance renewals due to the plate change, but the study showed that 44 per cent of drivers allowed their insurance to automatically roll-over, 13 per cent doing so without checking to see if they could get a better deal.

The news comes just weeks after it was revealed the cost of setting up car insurance has risen by as much as 82 per cent since 2012, while cancellation fees have soared by almost 50 per cent.

>> How to save money on your car insurance

Two out every 10 drivers said the main reason for renewing automatically was the assumption insurers offered the cheapest premium the previous year, so they would continue to offer good value this time around. The same number claimed that switching was too much hassle.

Other reasons for not changing included, ironically, loyalty to their insurance along with not dealing with the hassle of canceling a monthly direct debit.

Drivers who pay for their insurance monthly rather than annually are 55 per cent more likely to allow their policy to automatically renew.

Concerningly, the research revealed many driver's admitted to having no idea whether their compulsory excess had increased or not with 7 per cent admitting they don’t know what a compulsory excess is.

"Insurers typically use their most competitive offers to attract new customers and rely on existing customers’ apathy to charge higher renewal prices. With 55 per cent of drivers more likely to allow their policy to automatically renew if they pay monthly, it’s time for people to take control of their finances and consider how much they could be saving by switching," said Lee Griffin, CEO, and founder of GoCompare.

Comments

Nick Spindler    on 27 August 2019

You simply need to be very attentive in my experience. Using a comparison site gets lots of cheap quotes, but if you’re not careful the excess is set high, or valuable extras have been stripped out.
But sadly the industry isn’t clean, and exploits our laziness, or misplaced belief in loyalty.

A call to your existing insurer often results in the price coming down if you hint about leaving.

DrTeeth    on 27 August 2019

I will not give my business to my current insurer if they will drop the price as a punishment that they were overcharging me, or trying to, in the first place

David Raynes    on 27 August 2019

At my recent renewal with LV, I called to pay by debit card, I was asked if I wanted to go onto auto renwal, I refused and explained why. The Operator immediately knocked £10 pounds off my current renewal, just because of that little grumble. She described it as a loyalty bonus.

   on 27 August 2019

I don't believe what GoCompare are saying, I think it is GoCompare trying to drum up their business by the back door of fearmongering. You are always sent a quote for the renewal so you can decide to take it or go elsewhere. My renewal actually dropped £12 this year, a good reason to stay.

aufdermaur    on 27 August 2019

> I don't believe what GoCompare are saying, I think it is GoCompare trying to drum up their business by the back door of fearmongering. You are always sent a quote for the renewal so you can decide to take it or go elsewhere. My renewal actually dropped £12 this year, a good reason to stay.

My renewal also dropped the price (by £25) but that didn't mean that upon doing a comparison search on one of the major websites that the price fell by a further £50 with the same insurer. I will be taking the time to call them and get the lower price. You've been palmed off with a derisory drop in price, don't accept it!

mmmmm    on 27 August 2019

I don't believe what GoCompare are saying, I think it is GoCompare trying to drum up their business by the back door of fearmongering. You are always sent a quote for the renewal so you can decide to take it or go elsewhere. My renewal actually dropped £12 this year, a good reason to stay.

Well done you, for realising that GC are trying to expand their business. In your own words "go elsewhere", where do you think that most people go, yes, its web based comparison sites.

Your renewal "actually dropped £12 this year", and?. Spend a few minutes on the dreaded comparison sites and you might find several policies offering premiums several times that amount less.

Insurance companies love fools such as you, keep on going.

Howard Buchanan    on 28 August 2019

I believe MoneySupermarket has more integrity than the other comparison sites, so use them instead.

brk109    on 27 August 2019

I never accept them, I do a search and pick up excatly the same policy again with all the bells and whistles still attached, cancel my old policy and start a new one, normally saves at least £40 every year, If you take out one of Hastings direct premium policy they try and srtip out certain things, It simply the "New customers only routine", I have a policy with "No" excesses, when it comes to renewal they seem to have sneaked in a £100 excess, so not only do they rip you off on the policy ,they actually do change what you think you arec paying for.

Same answer every year when you give them their review, some "KNOB" from Hasting comes onto the end of your review and claims it hasn't happened, please check your policies, it certainly "DOES" happen every year !!!!!

Edited by brk109 on 27/08/2019 at 20:32

Howard Buchanan    on 28 August 2019

From many perspectives insurance generally is something of a racket, full of pitfalls for the unwary and usually working by design to the disadvantage of the customer. Some firms are now putting you on auto renewal with no request to do so and no open declaration. If this happens you should contact them, preferably by response requested email (so there's a record), and demand that you be taken off auto renewal immediately.

Cuzd    on 29 August 2019

A word of warning!!! I used M&S's Insurance broker - online - which stated that my policy would be automatically renewed - unless I rang and cancelled auto-renewal - which I did! Fast-forward 12 months and I received an M&S email saying my insurance had been automatically renewed. "Dam, I must not have cancelled the auto renewal," I thought. Now I receive about 50 emails a day...and a couple of days later I failed to spot the fact that I'd received a second email from M&S in my 'in box'. A couple of months later I received a letter from the DVLA saying my car appeared to be uninsured - yet it had no no record of a SCORN notification. I searched my emails - knowing I'd been notified of my M&S renewal...and found the second (unopened) email from M&S stating that they'd been unable to renew my cover due to the credit card details having been removed! I've never failed to insure my car(s) in over 50 years of driving...until this year! I could so easily have been stopped - by the auto number plate recognition camera units - and prosecuted for not having insurance. I'd have been mortified...but my defence would be zero. Just be aware!!!

Oh, and when I did renew my insurance with M&S - in a panic after receiving the DVLC letter - the premium had DROPPED by £40!! :)

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