Staying loyal to your car insurer may be costing you up to £270 extra per year
A total of 16.8 million UK drivers let their car insurance auto-renew last year, at an overall cost of £674 million, new research has revealed. This was a 175 per cent increase on the year before.
Price comparison site, MoneySuperMarket, found that 41 per cent of drivers let their car insurance increase automatically - more than double the number who did so in 2018.
Out of those who stayed loyal to their insurers, nearly three quarters (73 per cent) saw their premiums increase by an average of £40, while 20 per cent saw increases between £51 and £125.
Nearly one in 10 of those who took the survey allowed their car insurance to renew automatically without shopping around for a cheaper deal.
21% automatically renewed their insurance for convenience
A fifth (21 per cent) of people cite convenience as the reason for staying with their existing provider, while 16 per cent believe changing their insurer is too much time and effort. One in 10 do not believe that there are significant savings to be made by switching.
The Financial Conduct Authority introduced auto-renewal notification rules in April 2017 to discourage drivers from letting their car insurance policies renew. Insurers are now required to prominently display new premium prices alongside current ones, alerting customers to any increase or decrease.
Despite these rules, more than half of drivers said they did not recall seeing these notifications.
East London has the most expensive premium
According to figures from last year, London as a whole had an average car insurance premium of £708, compared to £388 in Scotland.
Residents in East London had the most expensive premiums (£1,003) in the UK, while Kirkwall in Scotland had the cheapest (£311).
Dave Merrick, car insurance expert at MoneySuperMarket said, “If you let your car insurance auto-renew you’ll more than likely see an increase in your premiums, with our research showing that the average premium can increase by £40.
“Although some of us are shopping around for a better deal, the number of people allowing their policy to auto-renew has doubled in just a year, meaning that even more people are paying a loyalty tax by staying with their insurer.
“Shopping around for a new deal on your car insurance couldn’t be easier and you save an average of £270.”