Martin Lewis has warned motorists that auto-renewing your car insurance is “never the right thing to do” and explained that the “perfect time to get quotes is around 23 days” before your current policy expires. The financial guru also advises people to check “at least two or three” comparison websites to find the cheapest deal before renewing.
During his latest BBC Radio 5 Live Podcast, the money expert shared how sending yourself a delayed delivery email or making a note in your diary, could cut the costs of renewing your car insurance by 50 per cent - potentially saving you hundreds of pounds. Martin admitted that renewing 23 days before the policy ends may “sound bonkers, but it’s absolutely true, timing can save you hundreds of pounds”.
Martin and the team at MoneySavingExpert.com analysed more than 70million car insurance quotes to find the exact date to renew to get the cheapest deal, and 23 is the magic number - although he added that “three or four days either side of that doesn’t make much difference”.
The consumer champion said: ‘Auto-renewing is never the right thing to do, you should always check across the market whether you can get a cheaper deal. You can use a comparison site, but remember comparison sites are actually marketplaces in their own right these days under the regulations.
“They don’t all list the same car insurers on them and they don’t have to charge the same price for car insurance. As long as they’re not more expensive than going direct, different car insurance comparison sites can list the same insurer at different prices - depending on their agreements with those insurers.
“Which is why I would always suggest that you want to use two or three comparison sites to find your cheapest deal.”
Simple ways to cut the costs of car insurance
Martin explained: “The perfect time to get quotes is around 23 days before your renewal, so get that in your diaries or send yourself a delayed delivery email so that it will arrive and you will be able to go and get your quotes at that time.”
He clarified that quotes should be from different firms and not your current car insurance policy provider.
Martin continued: “This may sound bonkers but it’s absolutely true, timing can save you hundreds of pounds. My team and I have analysed more than 70million quotes and that’s where the 23 days comes from, though three or four days either side of that doesn’t make much difference.”
He also gave an example of how the policy pricing works: “30 days beforehand an average car insurance quote is around £1,000 then it drops very sharply to around £800 around 27 days before renewal and it stays roughly flat, but bottoming out at 23 days until around 15 days before renewal when it starts to rise again. It hits the £1,000 again eight days before renewal, but if you are getting your car insurance quotes on the day of renewal, you would then pay £1,200.”
Martin added: ‘Forget the actual numbers, that’s just an example, your car insurance might be cheaper, but it shows you from the cheapest day to the most expensive day - from 23 days to renewing on the day of your renewal - you would pay 50 per cent more.
“It is a massive difference, timing it right really works.”
Martin explained the simple reason for this is that the car insurance pricing is about risk and firms look upon people who leave renewing their policy to the last minute as a higher risk. People who time it perfectly and renew 23 days in advance are seen as a lower risk, so they get the cheaper prices.
You can listen to the latest Martin Lewis Podcast on BBC Sounds here.
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