Martin Lewis' warning to drivers renewing their car insurance
16 August 2023, 11:17 | Updated: 17 August 2023, 12:59
The Money Saving Expert is encouraging motorists to stay savvy when it comes to renewals – or potentially lose hundreds of pounds.
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Martin Lewis issued a stern warning last month to drivers renewing their car insurance policies, urging motorists to never accept "ridiculous" quotes from firms.
Instead, the finance guru encouraged those with existing policies to be wary of renewals and shop around for better deals.
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Since his advice, moneysavingexpert.com has revealed the best time to find a bargain deal is 20 to 26 days before you want your car insurance policy to start – prices will rise if you're too early or too late.
And with the cost of car insurance reaching an all-time high since records began in 2012, experts are urging drivers to act now or they could potentially lose hundreds of pounds.
"I’m hearing more and more ridiculous car insurance cost rises, be careful," tweeted Martin on 24th July.
"Never accept these, ensure you don’t just renew, always combine comparison sites, check Direct Line too and find the cheapest, (or try MSE’s compare+ which does most of it)."
A rule passed in January 2022 now means car and home insurers are banned from luring new customers in on cheap deals, then bumping up prices for future renewals if there has been no change in circumstances.
However, that doesn't always mean drivers are being offered the best options.
"While insurers can no longer charge renewing customers more than newbies, that doesn't mean you'll get the best price by staying put," said moneysavingexpert.com.
"Different insurers have different prices so you should still compare to see how much you could save from switching.
"Our advice has always been to never just auto-renew – instead combine comparison sites to scour 100s of insurers in minutes."
There are other easy ways to reduce the cost of your insurance, from tweaking your job title to making sure you are on the electoral role.
Another helpful way some motorists can reduce prices is by adding a responsible driver to the policy.
The website explains: "It may seem counter-logical, but covering an extra driver can reduce rather than increase your cost – in some cases by £100s or £1,000s.
"If you're a high-risk driver and you add someone who is a much lower risk as a second (or third) driver, they can bring down the average risk and you may get a cheaper policy."
The advice also highlighted that paying your policy annually is more cost-effective than splitting it across 12 months.
"A monthly payment plan for your insurance is essentially a high-interest loan, and can vary from under 20%, to over 40% APR.
"For example, if your premium is £1,000 and you want to pay monthly, you could pay £95/mth, which is £1,140/year (£140 more) at an average APR of 25%.
"So pay in full, or if you can't afford it, use a credit card with a lower interest rate," added moneysavingexpert.com.
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