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Don't let your car insurance policy auto-renew
You risk losing out on better deals when you stay with the same insurance
provider year after year
Letting your car insurance auto-renew could be costing you up to £388 a year.
That's according to Consumer Intelligence, which estimates that 51% of car insurance customers could save up to £388.64 by shopping around.
Even if you don't switch insurer, getting quotes from others could help you save money through haggling.
A Which? survey of 14,408 Which? members who renewed or switched car or home insurer between May 2021 and June 2022 – before premiums really began to rise – found the average haggler saved £56 on their car insurance.
Here we explain how car insurance auto-renews and how this convenience could be costing you dearly.
What is auto-renew car insurance?
When you take out a car insurance policy, the 12-month agreement will usually stipulate an auto-renewal clause. This means that once your initial one-year contract lapses, you will be automatically enrolled for another year.
All the details of your initial agreement will stay the same, including your no-claims bonus, add-ons, fees and charges, but your premium could rise.
Although insurers have been banned from charging customers more just because of their loyalty, premiums can still increase if your insurer's costs have gone up (for instance, repairs and parts). And not all insurers are raising prices at the same rate.
This could mean last year's bargain cover is now far from competitive.
Using a comparison tool is one of the easiest ways to see what all the different policies are, their costs, how they were scored by their customers and Which? experts, and whether their unique offering is suitable for you and your car.
Our partner Confused.com compares prices from more than 100 insurance providers to help you choose the right policy. Get a quote now.
Will I lose my no-claims discount?
No. You are able to take your no-claims discount with you. Many years without claims will make you a very attractive prospect to a new car insurer.
Each provider will have different no-claims discount caps, both in terms of how much you could save and how many claims-free years it'll take you to get there.
Research published by Confused.com revealed that the average car insurance with zero years’ no-claims discount (NCD) was £1,734. This drops to £989 with two years NCD, or even lower to £522 with 10 years or more.
So, it's worth checking the biggest NCD on offer from insurers for your claims record, although make sure getting a low premium remains your first priority.
- Find out more: Best and worst car insurance companies
When is a good time to change my car insurance policy?
The optimal time to renew your car insurance is 21-30 days prior to your policy expiring.
If you leave it too late, or forget, your auto-renewal will kick in and you could be tied to your current insurer for another 12 months.
There are drawbacks if you decide to switch providers halfway through your insurance term – you'll usually be charged a fee for leaving early, and you may end up paying up for two insurance policies during the crossover period.
Insurance reviewer NimbleFins found that the average cost for leaving a policy early, after the 14-day cooling period, was £55. Our survey of provider fees found it goes as high as £58 in the case of the AA.
This cost can easily be avoided if you wait, then shop around 2-4 weeks before your policy ends. Your provider should send you a letter during this period to remind you of the upcoming renewal.
Can I switch off auto-renewal?
Yes. When you start a policy with an insurer, they will automatically opt you into auto-renewal. You can call them and ask to opt out to ensure that your policy will not renew at the end of your agreement.
Put in a calendar reminder 30 days prior to your policy expiring. This is so you don't risk your policy expiring without having set up a new one, which could result in you needing temporary car insurance and paying much more than you had budgeted for.
Whether you choose to move or stay with your current provider, shopping around and finding out what the best car insurance deals are is always better than letting you policy auto-renew.
- Find out more: How to find cheap car insurance
Which? Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665 and is an Introducer Appointed Representative of Inspop.com Ltd for the introduction of non-investment motor and home insurance products (FRN 610689). Inspop.com Ltd is authorised and regulated by the Financial Conduct Authority to provide advice and arrange non-investment motor and home insurance products (FRN310635) and is registered in England and Wales to Greyfriars House, Greyfriars Road, Cardiff, South Wales, CF10 3AL, company number 03857130. Confused.com is a trading name of Inspop.com Ltd.
