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Should I auto-renew my car insurance?

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When your car insurance auto-renews, it’s one less thing to tick off your to-do list, but what if you’re missing out on saving money? Auto-renewal is the easier option, but it can also be the more expensive one too. You could find a cheaper car insurance quote if you shop around for a better deal. Here’s why you should consider ditching auto-renew and what you need to do to find the best car insurance deals.

Should I auto-renew my car insurance policy?

Car insurance policies usually last for one year, and when they run out, most providers automatically renew them. By removing the hassle of remembering to renew, drivers can have peace of mind that they’re always insured to drive on the roads and avoid unwanted penalties and fines. Just because auto-renew is convenient, that’s not to say it comes without its downsides – it could end up costing you more money in the long run.  

Your car insurance provider will send you a reminder around three to four weeks before your policy renewal date. At this point, you can choose to continue with your current provider or switch car insurance – most UK customers choose to auto-renew, but here’s why you may want to reconsider. 

Auto-renewed car insurance usually has an annual price hike. Even though nothing has changed on your policy, you could end up overpaying. There are also different types of car insurance depending on what type of car you have. For example, classic car insurance is designed for older cars that are used for leisure purposes. Classic car insurance premiums will typically be less than standard car insurance since your provider knows the vehicle is only driven on occasion and is less likely to be involved in an accident.

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Car insurance premiums have increased by nearly 50 per cent this past year.

Factors such as inflation, rising energy bills and the higher cost of repairing vehicles are driving the cost of premiums higher.  

Although most providers auto-renew, it’s best not to assume your policy does. If you haven’t received a reminder letter, you should promptly contact your provider to check if your policy will automatically renew. When you take out a new policy, this is a good time to double-check if your policy will auto-renew or not.  

Remember that just because your policy auto-renews, you are free to switch to a new provider – doing so could save you money.

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When is the best time for car insurance renewal?

The best time to renew your car insurance is around three weeks before your renewal date. The closer you get to reaching the end of your policy, the more expensive your new car insurance quote becomes.

You should receive your renewal letter from your current provider around three to four weeks before the renewal date – if you’re considering switching, this is the best time to do so. 

There are plenty of car insurance providers to choose from, and you should shop around to find the best deal available to you. The best place to start is by looking at your current policy renewal letter. The letter will include your previous payment amount and your new one, should you decide to continue with your current provider. You’ll want to compare your renewal price with new quotes to establish which is the best deal. 

To find the best deal on your car insurance you should:

  1. Use a comparison website. You’ll be able to compare multiple quotes easily all in one place. 
  2. When you’ve found some deals that appeal to you, it’s advantageous to read provider reviews written by customers – Trustpilot gives providers a score out of five based on reviews left by customers. 
  3. You should also check the provider’s Defaqto score. Defaqto is an independent, unbiased service that compares financial products. The service rates car insurance providers out of five and is well trusted by most businesses and consumers.

What influences the cost of car insurance policies?

Your insurance provider will review various details when establishing your premium. Certain factors relating to your driving history will determine the cost of your car insurance. If any of these details change, this too, could affect your premium. 

Factors that affect your insurance premiums include:

  • Your age
  • Your job
  • Your address
  • Annual mileage
  • Model of your car
  • Value of your car
  • Your driving history – including previous claims or criminal convictions 

You should check with your car insurance provider if you are obliged to inform them of any changes relating to the above. Each provider will have a different set of rules to follow, so it’s best to check directly.

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What can I do to lower my car insurance renewal premiums?

When it comes to renewing your car insurance, there are a few things you can do to shave money off your premium. 

  • Compare prices and move fast: You’re likely to get the best deal if you renew around three weeks before your policy is due to end. Do not leave it to the last minute, as this will increase your premium 
  • Include a named driver on your policy: If you’re a new driver, you could benefit from adding a driver with a good history and experience to your policy as an occasional driver. You should never add them as the main driver – this is car insurance fronting and it’s illegal  
  • Make security a priority: Investing in an industry-approved alarm or wheel lock could lower your premium. Parking your car off-road in places such as a car park, garage or drive may also increase your chances of a discount
  • Increase your voluntary excess: Increasing your voluntary excess (the amount you choose to pay towards any claim you make) usually decreases your premium. Just make sure that should you need to make a claim, you’re able to afford both your compulsory and voluntary excess

You can use a car insurance calculator to find out how much your car insurance premium would be for the year. You might find you could save money by opting out of auto-renew and switching providers.

Frequently asked questions about car insurance auto-renewal

For some drivers, pay-as-you-go car insurance could be more beneficial than an annual policy. If you drive less than 6,000 miles annually, then an auto-renew policy might not be the best option for you. With pay-as-you-go car insurance, you’re charged for each mile or hour you drive plus a standard fixed rate, which covers your car against theft or damage when it’s parked.

You can cancel your auto-renewal policy at any time during your policy. To do this, you would need to call your provider, as more often than not you’re not able to do this online. If you are considering cancelling your auto-renew policy, make sure this doesn’t affect you being insured. It is illegal to drive on the road without car insurance.

One way to reduce your car insurance premiums is to consider telematics car insurance. This type of insurance, also known as black box insurance, allows your provider to monitor your driving style via a small black box that is installed in your vehicle. The black box provides details relating to mileage and your driving habits, all of which can help decrease your premiums.

rachel

Rachel Sadler

Home Tech Writer

Rachel is a seasoned writer who has been producing online and print content for seven years. 

As a home tech expert for Independent Advisor, Rachel researches and writes buying guides and reviews, helping consumers navigate the realms of broadband and home security gadgets. She also covers home tech for The Federation of Master Builders, where she reviews and tests home security devices. 

She started as a news and lifestyle journalist in Hong Kong reporting on island-wide news stories, food and drink and the city’s events. She’s written for editorial platforms Sassy Hong Kong, Localiiz and Bay Media. While in Hong Kong she attended PR events, interviewed local talent and project-managed photoshoots. 

Rachel holds a BA in English Language and Creative Writing and is committed to simplifying tech jargon and producing unbiased reviews.

Molly Dyson

Editor

After growing up with a passion for writing, Molly studied journalism and creative writing at university in her home country of the United States.

She has written for a variety of print and online publications, from small town newspapers to international magazines. Most of her 10-year career since relocating to the UK has been spent in business journalism, writing and editing for admin professionals at PA Life magazine and business travel managers at Business Travel News Europe and representing those titles at conferences around the world.

Now an Editor at the Independent Advisor, Molly is an expert in a broad range of consumer topics, that include solar panels and renewables, home improvements and home insurance, and consumer technology such as home security and VPNs.

In her free time, Molly can usually be found exploring the outdoors with her husband and their young son or gardening.