Car insurance policies should not be automatically kept in place because it’s the easy thing to do as experts push motorists to shop around. They revealed now could be one of the worst times to auto-renew a policy as costs could soon tumble amid the coronavirus pandemic.
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Car insurance prices see highest rise in two years
As it stands, costs are at their highest level for two years with an average agreement standing at £800.
However, less journeys are being made due to lockdown restrictions and experts predicted the shutdown would “likely” lead to price drops.
Shopping around now could therefore see motorists secure a policy under a new pricing structure rather than pay elevated costs.
Renewing a statement now could see motorists sign up to a policy potentially hundreds of pounds more expensive than other options.
Research from Confused.com revealed over a third of drivers who noticed a price increase opted to shop around to make savings.
Those that do switch to a better deal save an average of £59 on premiums while some make even higher savings.
Analysis has revealed one in six drivers who switched to a new policy could find an agreement more than £100 cheaper than the original price.
Confused.com CEO Louise O’Shea claimed failing to shop round could be “costly” as she urged motorists to take a few minutes to find a better deal.
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She said: “Automatically renewing with your insurer might seem like the easiest, stress-free option, but it could be costly.
“Even if your renewal price is cheaper, or the same, it’s likely there will be another insurer out there willing to offer a better price.”
Ms O’Shea added: “Please don’t pay more than you have to – take a few minutes to check your renewal letter and get a cheaper price because now, more than ever, it’s so important to shop around.”
Switching providers is usually financially beneficial to motorists anyway as companies engage in something known as “price walking”.
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This is when companies offer you their very best price at sign up before gradually increasing your agreement to its true value year-by-year.
Switching providers ensures your prices remain at heavily discounted rates across a range of different companies.
According to Confused.com motorists can also cut back their costs by deciding to pay annually where possible.
Monthly bills may be more convenient but can be up to 16 percent more expensive than paying an upfront cost.
This is because monthly arrangements will usually carry a small rate of interest on top of the original value.
Drivers could also make savings through adding extra security services or opting for black box insurance.
Choosing the right type of cover could also be vital to reducing prices in the long-term.
Many may decide to go for third party fire and theft cover believing it will be the cheapest policy on the market.
However, Confused.com says this may not always be the case due to the higher risk of drivers who opt for the policy.
This could push the average prices of these agreements up and may make them more expensive than fully comprehensive cover.
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