Household bills have risen across the board recently, so the last thing that drivers need is a higher car insurance renewal quote this year, even if they haven’t made a claim.
Like so many other essentials, car insurance hasn’t escaped rising cost pressures, with insurers claiming that steeper repair costs are bumping up premiums.
According to research carried out by Ernst & Young (EY), premiums are forecast to be up 15% by the end of 2023, with latest data from comparison site Comparethemarket.com showing that average annual car insurance premiums reached £651 in March this year – a £105 or 19% increase compared to the same month in 2022.
If you’ve recently received a renewal quote that’s higher than you were expecting, or you’re due to receive your imminently, here are some tips that might help you drive down the cost of cover.
Pick the best day to renew
Believe it or not, the date you choose to renew your car insurance on can have a big impact on your car insurance premiums. Data from Go.Compare.com found that policyholders could end up paying up to 50% more if they renew their policy on the day it’s due for renewal, compared to if they’d renewed it 27 days earlier.
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Pay annually rather than monthly
If you can afford to, pay for your insurance up-front rather than in monthly instalments. If you pay monthly, you’ll be charged interest on these payments, so you’ll end up paying more overall.
Jenny Ross, Which? Money Editor, said: “At a time when household budgets are under huge strain, it’s concerning that customers who pay monthly for their insurance could be paying far more than those who pay their annual premium upfront. Paying using an interest-free credit card could help to spread the cost of annual premiums. Haggling and switching also remain effective ways of bringing down the cost of insurance.”
If you’re considering using a credit card to pay for premiums, make sure you’ll be able to settle the balance in full before the end of the 0% deal to avoid paying interest.
Get your mileage right
Make sure you give an accurate estimate of the number of miles you drive each year, as if you over-estimate the number, you could be charged more for cover. Julie Daniels, motor insurance expert at Comparethemarket.com said: “Low-mileage drivers could save on their car insurance by switching to a pay-per-mile policy. These flexible policies use telematics to only charge drivers for the miles they actually drive.”
Don’t assume that your current insurer will offer you the most competitive quote for your cover. It’s always worth shopping around with other insurers before you renew to make sure you’ve got the best possible deal, both in terms of cost and the level of cover offered.
Kevin Pratt, car insurance spokesman at Forbes Advisor, said: “When considering your options, it’s important to remember that the cheapest premiums might not provide the level of cover that you need.
“There are other factors to consider beyond price, such as how an insurer treats its customers and handles claims. That’s why it’s always worth taking the time to consider which providers will offer you the best value cover.”