Car insurance isn’t a cost any of us like shelling out for. Although there’s no escaping it, there is a way you can cut costs by timing it right.
When that time of year comes around again and your car insurance is up for renewal, for many of us, it can feel like another chore, and something we put off until the last minute.
But it doesn’t actually need to be a time-consuming job, and there is a limited window before to your renewal date when getting yourself organised could actually save you the big bucks, and that’s got to be worth doing, right?
The ideal time to renew
It’s a little-known fact that the best time to renew your car insurance is between three weeks and one month before the date you need your new policy to start.
That’s because recent research by moneysavingexpert.com compared data from some of the leading price comparison websites and discovered almost identical trends in pricing that reflect this timeframe.
How much money are we actually talking about?
The study in question found that policies purchased on the day they’re due to start cost on average between £567 and £1,156 more than those purchased in the ideal renewal time (between three weeks to a month before).
Why’s this the case?
You’re probably wondering why there’s such a massive price hike, and understandably so. Most people assume their renewal quote is based on things such as your driving record, type of car you drive etc. but actually insurers factor in lots of other variables alongside this.
How are premiums worked out?
As well as the factors we’re all aware of, like driving history, driving convictions, vehicle location, etc., the cost of your car insurance quote is based on risk, and to work out the ‘risk factor’, insurers examine patterns. And, the research by MSE shows that one of the patterns used to determine risk is how early you look for a quote before renewing.
In a nutshell, insurers believe that drivers who look to renew between three weeks and a month before their policy is due to expire are more organised and careful, whereas those who leave it until the last minute are deemed a higher risk.
Other ways to save money on your premium
So now you know the best time to think about renewing your car insurance policy, how else can you ensure you get the best deal?
Don’t settle for less
It can feel like the easiest option to just stick with your current insurer, and they might even attempt to reel you back in for another year by offering a small discount on last year’s premium.
However, spending an extra couple of minutes online will nearly always save you money, and it really is as simple as that.
Price comparison websites
One of the quickest and easiest ways to make sure you’re getting the best possible deal on your renewal is to use a price comparison website.
Some of the best available comparison sites will work with over 100 insurers, meaning you’re going to be able to compare lots of options, prices and types of cover by just filling in your details once.
How they work When it comes to using a price comparison website, you’ll be asked to give some personal details, information about the car you’re looking to insure, as well as your driving history and the type of cover you’re interested in.
Once you’ve entered this information that’s it, you sit back and watch the quotes fly in. The obvious benefit here is that you don’t have to spend lots of time painstakingly re-entering the same information to get multiple quotes. Instead, you’ll have access to over 100 leading car insurance providers in one go.
Isn’t it cheaper to go direct?
In a word, no. But this is a common misconception. While ultimately your premium will be determined by your personal circumstances (and when you renew!) it’s not the case that comparison websites will charge you more for their convenience.
In fact, comparison websites negotiate ‘special rates’ with insurers in return for their position in your search results and other perks, so you’ll get the best possible price and your comparison website will do the hard work for you behind the scenes.
What’s the lesson here?
There are two important things to remember when it comes to renewing your car insurance:
1. Put a note in your diary
Find out when your car insurance it up for renewal and count back 21 days. Get organised and put a reminder in your diary. You’ll be pleased you did and will find the best possible renewal price when the time comes.
2. Compare prices
When the time comes, don’t rest on your laurels. The goal is to save money on your renewal cost and the best way to achieve that is by using a price comparison website to the hassle out of shopping around and save yourself money – it’s a win-win!
Disclaimer: All information and links are correct at the time of publishing.