Martin Lewis has called out the “absolutely ridiculous” rule that results in car insurance firms charging drivers heftier premiums for late renewals. The Money Saving Expert founder highlighted that companies ramp up charges when motorists delay their renewal, increasing their “actuarial risk”.
Getting a quote weeks ahead of your current policy’s expiration could indicate you’re not in a rush, potentially leading to more competitive offers. Shockingly, Martin disclosed that some insurers were charging customers up to 100 per cent more for last-minute renewals. In his research, Martin also pinpointed the optimal time for drivers to renew their policy in order to bag the best deal.
Speaking on ITV’s Tonight programme last year he said: “The perfect time to get car insurance is 23 days before your renewal. That’s not for your renewal quote, that’s for going onto comparisons to get different quotes.
“It seems absolutely ridiculous but insurance pricing is all about actuarial risk. And what their risk shows them is the type of people who get car insurance early are a lower risk so they give them a lower price. You might pay nearly double if you wait until the last minute to get your car insurance.”
Money Saving Expert has consistently emphasised the potential savings – running into hundreds of pounds – that can be made by securing an early renewal, ideally about three weeks before the deadline.
A study analysing 70 million quotes from various comparison sites revealed the average quote on the actual day of renewal is £1,198. However, drivers could bag the same offer for a mere £694 if they secure it 23 days in advance, reports the Express.
This could lead to a massive saving of £504 on a policy – a welcome relief for motorists watching their wallets. The experts at MoneySuperMarket have also backed the idea that snagging an insurance deal between 15 and 29 days before the renewal date tends to be the most cost-effective move.
Procrastination past this golden window gets dicey, but it’s still usually less expensive than waiting until the eleventh hour or even a couple of weeks prior to renewal day. For those who’ve let the ideal 23-day period slip by, acting swiftly remains critical to mitigate costs.
They detailed: “According to our research, car insurance premiums start to go up within two weeks of your current policy ending, and the sharpest rise comes around three days before.
“So as long as you buy before then you should avoid the big price hike reserved for those who leave it until the last minute.”
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