Why You must Shop Around for Car Insurance

Why you must shop around for car insurance

Apathy can be dangerous, particularly during these financially insecure times. If you’re looking to cut back on your outgoings then paying attention to your car insurance renewal should leap up your list of priorities.

Providers rely on apathy to reap profits. Many lure consumers in with competitive deals or special discounts on year one, only to increase the premium year-on-year - hardly offering the reward you would expect for loyalty. Drivers often wrongly assume that because the premium they initially received when applying for a car insurance policy was one of the cheapest available they won’t be able to better that deal a year down the line. However, the reality is that you will almost always be able to find a cheaper policy if you shop around.

How much is being wasted by renewing car insurance policies

Research by a comparison website predicts that motorists will waste £141 each - that’s £9.4billion collectively - by sticking with an existing insurer and failing to shop around this year.

It finds that one in five drivers automatically renew their car insurance with their existing provider instead of shopping around. Around one in eight say they don’t believe they can find a better deal, while around eight per cent simply say that they cannot be bothered to look around to see if they can save money.

Drivers tend to be loyal to their providers for an average of 2.7 years with the over 70s being the most faithful group, sticking with their providers for an average of 3.8 years.

The sheer scale of drivers not making the effort to shop around is astonishing given the current climate. Simply put, not at least looking to see how much you could save is wasting your hard earned cash.

How easy is it to find a cheaper car insurance deal?

It would be easier to forgive nonchalant motorists for not shopping around if the process was as complicated as it used to be. In the past, finding insurance quotes was a time consuming process, calling around providers and filling out long forms. It would be understandable to keep things simple if the process were still that difficult.

However, the reality is that it’s now easier than ever to not just get one or two insurance quotes - but almost a complete overview of the market.

This is because of the explosion of car insurance comparison websites. These sites allow drivers to enter their details into an online form. They then ‘scrape’ all of the car insurers they have deals with - sometimes more than 100 - and return quotes based on your details. This gives the consumer the chance to look at what every insurer has to offer before deciding on the right deal for them.

The quotes you receive through a comparison website are the same as going directly to an insurer. What’s more is that these facilities are completely free to use. Comparison websites make their money in two ways - advertising; and also by picking up an effective ‘finder’s fee’ from the insurers when you click through to their websites. However, there is no additional charge to the consumer. Therefore there is no disadvantage to using these websites, but a lot of advantages to the process.

What’s more is that you may even finder cheaper deals on these websites than if you were to pick up a phone and call the insurers directly. This is because most insurers offer their cheapest deals online due to the savings they can make on overheads. The popularity of comparison websites has also pushed prices down as insurers are forced to be competitive with each other in a bid to attract business.

Even if you think your existing car insurance quote cannot be beaten, there’s nothing to lose by using one of these websites and seeing if that’s the case or not.

More savings to be made on car insurance

Once you’ve found a cheap deal, don’t assume that you can’t save even more on car insurance.

Most insurers will offer you a cheaper deal if you agree to pay your premiums upfront instead of monthly, for example - this will cut out interest charges. Consider adjusting your voluntary excess too - the higher you set the excess the more money you should save, although don’t go overboard as this is the money you will have to pay if an accident occurs.

More money can be saved on car insurance by increasing the security of your car, agreeing to a mileage limit, or taking an advanced driving course. Consult the insurer directly about further ways to save.