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Whopping £565* million lost every year when customers renew car insurance with current provider

Finance experts TotallyMoney warn that customers could be offered a worse deal if they stay with their current car insurance provider than if they were to renew with a new provider:

  • £565m is lost every year due to customers being loyal to current car insurance provider
  • 14 million customers are paying on average an extra £40 by renewing their car insurance with current provider
  • The average car insurance premium in the UK is an incredible £816, increasing to £1449 in the capital **
  • All 38.4† million cars in the UK need an insurance policy by law
  • The ‘loyalty penalty’ is due to come to a halt when new FCA regulations come into force. But it is unknown when this will be, so customers should switch now

 

No reward for loyalty

When the time comes for customers to renew their car insurance policy it seems only natural to stay with their current provider; it’s comfortable to stick to what you know, and it’s incredibly easy to do what’s familiar. However, recent figures reveal that a staggering £565m is lost each year by customers who auto renew their policy with their existing car insurance provider.  

After a sustained period of cuts in the cost of car insurance, latest trends show that car premiums are starting to increase*‡.* It’s therefore more important than ever that customers search for other deals to ensure they’re on the best and most affordable one possible. 

 

Just in time

Long-overdue changes from the Financial Conduct Authority§ are welcomed to put a stop to this unfair loyalty charge customers face when renewing, but with no official word as to when the changes are coming into force, it’s incredibly important that customers avoid being automatically rolled over onto a more expensive deal.  

Finance experts TotallyMoney have partnered with comparison specialists Seopa, to launch their new car insurance instant quote service right before February‖, the month where customers are likely to find their best deal with insurance premiums being at their cheapest. 

 

Alastair Douglas, CEO of finance experts TotallyMoney comments:

With customers being punished for their loyalty, and a car being an essential item for many across the UK, the car insurance industry can be seen as unfair. 

“Millions of pounds are lost every year because of this, money that could be kept in customers’ pockets and better spent on other essential items. 

“Customers should be aware that their best deal is not always with their current provider, in fact it rarely is, and they should shop around before renewing their policy. 

“With a third of customers paying monthly for their policies, credit scores play an important role when insurance providers run a credit check for this purpose. Customers should check their report before applying, to raise a dispute and correct any errors. This way they can be sure that they’re getting the best deal for their true circumstances.

“At TotallyMoney, we’re on a mission to improve the UK’s credit score and help our customers move on up to a better financial future. Helping our customers save money on their car insurance is a significant step forward in achieving this goal. Whether those savings are used to pay off more of their debt, or to simply make day-to-day life a little bit easier, it’s clear how a small change could make such a big difference to the lives of many across the UK.”

Sources:

*https://www.moneysupermarket.com/car-insurance/auto-renewals/ 

**https://f.hubspotusercontent10.net/hubfs/2037313/Motor_insurance_price_index_dec20.pdf?__hstc=112691803.ab67e261f2ece75dde799ec6d3b240b5.1609761319698.1609761319698.1609761319698.1&__hssc=112691803.1.1609761319699&__hsfp=1309702554 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/917501/vehicle-licensing-statistics-april-to-june-2020.pdfhttps://www.moneysupermarket.com/car-insurance/price-comparison-index/ 

https://www.fca.org.uk/news/press-releases/fca-sets-out-proposals-tackle-concerns-about-general-insurance-pricing

https://www.yourmoney.com/insurance/february-is-one-of-the-cheapest-months-to-buy-car-insurance/


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