How To Save £££s On Your Car Insurance Renewal

Practical steps you can take to save money on your car insurance renewal.

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Car Insurance Renewal

Now more than ever, people are looking to cut their household bills as inflation increases and prices rise. One of the biggest monthly expenditures is car insurance, which, after years of declining premiums, is now starting to go up again.

However, despite rate increases across the board from many insurers, there are a number of simple steps you can take to keep your price down as low as possible.

1. Never automatically accept the renewal quote from your current insurer

We all have busy lives but ignoring letters about your car insurance is a big mistake, especially if like millions of people you have agreed to auto-renew your policy.

Insurers generally send out your renewal letter about 2-4 weeks before your renewal date. Auto-renewing your insurance is perfectly legal for companies to do and usually forms part of your agreed insurance contract when you buy the policy. The renewal letter should state your new price for the coming year together with the price you are currently paying so that you can compare both.

If you simply ignore the letter and do nothing then your insurance will automatically renew with the new price. The problem is that this new price could be substantially higher than you’ve been paying. You do not have to accept this renewal price.

2. Always shop around for a better price

Getting car insurance quotes can be tiresome and it’s not exactly something we like doing but allocating just an hour of your schedule to getting alternative quotes could be the best spent 60 minutes of your time this year.

Not every underwriter thinks exactly the same and the difference in price between one company and the next can often be significantly different, even though the risk is the same. You may be pleasantly surprised at how much you could save simply by switching providers.

For whatever reason, many people are still reluctant and wary of changing insurers with some customers staying with their provider for years and even decades. However, changing providers is now easier than ever and insurance companies understand and factor in a renewal retention rate for their business. There is nothing to be gained by staying loyal to an insurance company and they will certainly not think twice about increasing your premium if they need to.

In fact, for years insurance companies actually penalised loyal customers by offering better deals to new customers, a practice known as price walking. It wasn’t until the Financial Conduct Authority (FCA) banned the practice from January 1st 2022.

The FCA state that when a company send out a renewal letter they must:

  1. Show last year’s premium so that you can compare it to your new renewal price.
  2. Ask customers to check their cover and suggest they shop around for a better deal.
  3. For people who have renewed with the same provider four or more consecutive times, the company must state additional wording to get them to shop around.

3. Always try at least two comparison sites

Using a comparison website is an excellent way to quickly garner quotes from a large part of the insurance marketplace without having to visit individual insurer sites. Comparison sites enable you to complete just one form with your risk details and then show you quotes from multiple companies, often sorted by price and from over 100 products.

You may think that all comparison sites are the same so what’s the point of trying more than one. You’d be wrong.

You should always try at least two comparison sites and ideally a few more. The reason is that some comparisons may have different prices, even from the same insurer. They may have negotiated a special set of rates or discounts just for them. It’s also possible that some comparison sites include insurance companies or specific insurer products that others do not. So, whilst it can take a bit more time, it’s definitely worth getting quotes from as many comparison sites as you can.

4. Try Direct Line

It’s a well-known fact that Direct Line do not give out their rates to comparison websites, in fact they make a point about it on their website. In order to get a quote from Direct Line you have to visit their website.

According to business data platform, Statista, the Direct Line Group are the third largest motor insurer in the UK with 11.6% of the market. So, don’t ignore a company that has around 4.5 million customers.

If you’re serious about getting the cheapest quote then it’s also worth going direct to some of the other main providers, even though they are on the comparison sites. It’s possible that some companies may have better rates or quote for different risks on their own direct sales channel.

5. Remember to include an extra year of No Claims Bonus when getting quotes

When shopping around for alternative renewal quotes, ensure you include the extra year of No Claims Bonus (assuming you will be entitled to it) that you expect to have when your current policy ends.

No Claims Bonus (No Claims Discount) is probably the single biggest rating factor that underwriters use to apply a discount to your price. The renewal letter from your current insurer will offer a price that takes into account any extra year of bonus that you have earned, so you should allow for this when getting quotes.

6. Compare alternative quotes on a like for like basis with your current policy

When shopping around for alternative quotes, you should, where possible, use the exact same details as your current policy and check that the quote includes the same benefits and terms, otherwise you are not comparing apples to apples.

Such things to consider include:

  • The level of voluntary excess you choose and the standard compulsory excess that insurers have as part of their policy terms.
  • Is legal cover included or is it charged as an additional extra?
  • Does the policy include a courtesy car as standard?
  • Does the policy include breakdown cover?
  • Does the policy have an uninsured driver promise? Many companies include a guarantee that your No Claims Bonus will be unaffected if you’re in an accident with an uninsured driver.

7. Look at alternative product options

The insurance market is constantly evolving with new products that are more tailored to your needs and that could reduce your cost such as:

Monthly subscription car insurance

As the name suggests, this is a product that you renew each month as you need it. Unlike a full 12-month policy, monthly subscription insurance means you can cancel at any time and restart it when you need to. This is ideal if you are planning to not use the car for longer periods of time or you know you won’t be having a car at some point in the future.

Monthly subscription insurance will generally offer the same level of comprehensive cover as a regular policy. If you keep your policy going for a continuous 12 months then depending on the provider, you will earn No Claims Bonus as you would with any other policy.

Remember that the law states you must have continuous insurance unless you have completed a Statutory Off Road Notification (SORN) for the DVLA.

Pay as you drive / pay by the mile

For large parts of the day your car is in a car park, parked up on your driveway or in your garage. Why pay for insurance for the time your car isn’t being used? This is what pay by the mile type products aim to address.

There is usually a standard annual fee, which is significantly lower than your normal policy, and then a cost per mile when driving the car.

Car insurance is a legal requirement in the UK, regardless of how much you drive. This kind of policy suits someone who has lower annual mileage and does not do regular long trips.

8. Where to get cheap renewal quotes

I recommend you starting with the Brilliant Price comparison on this site. It scans over 100+ car insurance providers to find the cheapest available. You can then click on the quote you like and it will automatically take you to that provider's website along with all the details you supplied, so you don't have to enter them again.

SAVE up to *£334 on Car Insurance

Compare Quotes
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  • Buy online or by phone
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