Martin Lewis says car insurance prices could be heavily reduced if drivers simply shop round for new agreements rather than auto-renewing a policy. Shopping round ensured road users secure cover at the best price possible as many firms offer discounts to entice new customers.
- Martin Lewis warns against taking car insurance holiday
Mr Lewis said: “It might seem easier to do nothing and auto-renew each year, but by following MSE’s tried-and-tested system you can save £100s.
“Learn how to drive down prices by searching at the perfect time or legitimately tweaking your job description, plus a host of top tricks to compare all the offers on the market.”
One motorist followed the simple tip and used a price comparison site to find similar cover at a better price, saving £501 in the process.
The driver went to search for better deals after receiving a quote for a massive £895. They had admittedly “got lazy” and simply auto-renewed each year without checking agreements.
After studying a range of other policies, the driver was baffled with the level of savings possible from a simple comparison.
Writing to MoneySavingExpert, driver Marilyn said: “I’ve renewed automatically in the past as I got lazy (sorry).
“When a quote for £895 arrived, I knew I needed to shape up. So I went on a comparison site and got it for £394, saving £501 – how is that even possible? Thank you so much. Energy next.”
Martin Lewis has previously warned about the risks of auto-renewal after many motorists reported being caught out by the issue.
Car insurance: Do this when you renew to save a whopping £460 a year [INSIGHT]
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Speaking on the Martin Lewis Money Show back in February he revealed how most firms use “price walking” to increase costs each year by small increments.
He said: “When you get a car insurance price, they will tend to give you a cheap price in the first year, Then each year after they will walk the price up a little bit each year.
“So if you’ve been with them five or six years suddenly you’re 50 percent more than you would be than if you were a new customer, even with the same insurer.
“It’s called price walking, it’s a known thing that most insurers do.”
- Martin Lewis issues warning to 2.3million drivers
MoneySavingExpert have urged road users to never auto-renew an agreement and should instead use comparison sites to search across hundreds of policies within minutes.
They warn drivers the best time to search for a replacement agreement is about three weeks before the new policy needs to start.
Insurers will increase prices if you have less time to arrange a deal as motorists are more likely to panic and pay heavier charges.
However, they warn that many of the big insurance firms such as Aviva and Direct Line are not usually listed on comparison sites.
These big providers sometimes offer a range of cheaper policies and discounts which drivers are urged to search for before settling on an agreement they have seen elsewhere.
MoneySavingExpert also urged drivers to check if there are any special promotion deals which are not listed on comparison sites.
These could include discounts at high street chains or online marketplaces as a gift for choosing the provider.
This would not necessarily be a discount on a policy but would offer drivers extra savings on their outgoings or an extra treat.
The RAC reassure drivers that their no claims bonus will continue to grow no matter who you purchase your insurance with.
They urge drivers to consider the amount of discount they could be entitled to when shopping around to see if better offers are available.
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