Up to nine million drivers could be missing out on substantial savings by automatically renewing their car insurance with their existing provider.

Failing to investigate if you can find cheaper cover elsewhere could cost you dearly. According to new research by moneysupermarket.com, motorists can typically save £233 a year by scouring the market for a better deal – that’s nearly £100 more compared with last year.

Yet despite the savings they could make, more than three and a half million motorists admit that they ‘can’t be bothered’ to look for cheaper insurance. Motorists in London and the North East are the worst offenders, with one in three not shopping around at renewal time.

Steve Sweeney, head of car insurance at moneysupermarket.com said: “We have seen premium prices rocket over the past year, and this is mainly because of increases in fraudulent claims, personal injury claims and uninsured drivers, meaning insurers are putting policy prices up to compensate.

“It is alarming so many motorists are prepared to waste their hard-earned cash, especially when this money could come in useful elsewhere.      “In this current climate, it is shocking to see the sheer scale of drivers who won’t spend a few minutes to see if they can save money when renewing their car insurance.”

Loyalty doesn’t pay

The research also reveals drivers stay loyal to their provider for an average 2.8 years, with the over 55s the most faithful of the age groups, sticking with their provider for an average 3.5 years.

Those aged between 18 and 34 are the least loyal, staying with the same provider for an average of only 1.8 years.

Drivers in Northern Ireland are the most loyal to their insurers, continuing their policies with the same company for a typical 3.4 years, followed closely by those in the Scotland and the east of England who tend to stay with the same insurer for 3.3 years and 3.1 years respectively.

Steve said: “Providers count on your apathy to reap the profits and do not reward your loyalty with a cheaper premium. While they may lure you in with a competitive deal or special discount in year one of your policy, (not ordinarily available to existing policy holders), you can be sure your renewal price will include a hefty increase – hardly the thanks you were expecting for your loyalty.

“Even if you think your quote can’t be beaten, it only takes a few minutes to make sure you really do have the best policy to suit your needs.”

 

Other ways to reduce insurance bills

Shopping around for cover isn’t the only way you can cut the cost of your car insurance. Another way of reducing premiums is for newly qualified drivers to take part in the ‘Pass Plus’ Scheme.

The scheme, which takes a minimum of six hours, involves your driving being continually assessed. It costs around £150, and is designed to make drivers become more confident and responsible. Visit the Pass Plus website for more information. According to the AA, having the Pass Plus certificate can slash the first year’s insurance premiums by up to 35%.

If you are thinking of changing your car soon, then choose a car with a small engine if you want to drive down insurance costs.

Many motorists mistakenly believe that if the car is old, the insurance is cheaper. However, older cars are often easier to steal and tend to have bigger engines.

They are also heavier, so cause more damage if they are in a collision. Drivers should ideally go for a small car by a well-known manufacturer with a 1.0 or 1.2-litre engine if they want cheaper premiums. Many insurers offer online discounts, so the internet is often a good way to take out a policy. The typical discount is around 10 per cent

Think about security measures too – can your car be parked in a garage or off the street? If so, then insurers may charge you less.

Don’t modify your car either, for example by adding alloy wheels, as these are often considered an extra safety risk and can really hike up the cost of premiums.

Increasing your excess – the portion of any insurance claim you must pay yourself – will also reduce the cost of cover, but remember not to set it too high, as you may not be able to afford to make a claim.

Finally, you usually pay a bit more to pay for your insurance in monthly instalments rather than up front, so if you are able to pay the premium all in one go, you should do so.

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