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How to save £100 on car insurance this month – even if your policy isn’t due for renewal

February is the cheapest month of the year to take out a car insurance policy

How to save £100 on car insurance this month – even if your policy isn’t due for renewal

Drivers buying or renewing their car insurance policies this month can benefit from lower premiums than at any other time of the year.

Research by Compare The Market found that the average car insurance premium in February is £37 lower than the rest of the year, and £100 cheaper than in December.

Here, we explain what’s happening to insurance premiums and offer advice on how to get a great deal this month, even if your policy isn’t due for renewal yet.

Car insurance is cheaper earlier in the year

New data from Compare The Market claims that February is the cheapest month of the year to take out car insurance. The average premium in February is £629, compared to £666 for the rest of the year.

The price comparison website analysed how motor insurance costs fluctuated over a seven-year period, and found that prices are lower earlier in the year and then soar in the lead up to Christmas.

The chart below shows the average premiums paid for car insurance policies each month.

Who pays the most for car insurance?

The highest average premiums come in the London boroughs of Newham (£1,464), Tower Hamlets (£1,413) and Hackney (£1,369).

The lowest, meanwhile, are all in the West Country – specifically Caradon in Cornwall (£470), West Devon (£741) and South Hams in Devon (£478).

Compare The Market says younger drivers face the biggest burden when it comes to expensive insurance, with almost half of drivers aged 17-24 requiring help from their parents to be able to pay for it.

Should you renew your car insurance early?

If your insurance policy comes up for renewal in a more expensive month, don’t fret: car insurance policies bought in February don’t have to actually start the same month.

This means you can shop around and secure the cheapest car insurance deal now but actually start your policy later in the year.

Some insurers have a limit on how far in advance you can buy a policy, so check with the provider first.

Are car insurance premiums increasing?

Car insurance prices are based on a whole range of factors, including your job, where you live, your annual mileage, type of vehicle and previous claims history.

Insurers use ‘dynamic’ pricing. This means the price you’re offered can change throughout the year based on demand.

A recent report by Money Supermarket claimed premiums rose steeply in the last quarter of 2019.

It says the average premium was up 6.6% on the previous quarter, but still dropped by 4.6% year-on-year.

The dark arts of insurance pricing

Which? research conducted in January found that the additional fees charged by insurers are on the rise.

Data from Defaqto shows the number of policies with adjustment fees (charged when you change the details of your policy) of £30 or more have increased from 7% to 30% since 2011.

In addition, the percentage of policies that come with charges of at least £50 if you cancel after the cooling-off period has more than doubled in that time.

In October, the Which? Money Podcast investigated the tricky tactics insurers use to determine your premium and offered advice on how to get the upper hand.

You can listen below or check out the episode on Apple Podcasts, Google Podcasts or Spotify.

How to compare insurance deals

1. Don’t just choose the cheapest policy

Price is an important factor to consider, but don’t just go for the cheapest policy.

Doing so could end up costing you more in the long run if you haven’t bought the right level of cover or if the policy comes with additional fees.

2. Read the terms and conditions

Insurance Ts and Cs are notoriously complicated, but don’t let this put you off finding out what you’ll actually be covered for.

If you don’t purchase the right type of policy, you risk being caught out if you have to make a claim.

3. Set the right excess

If you set the voluntary excess too high, it could make a claim not worth pursuing, especially when you also take into account the compulsory excess set by the insurer.

It’s sometimes possible to reduce your excess to a much lower amount in exchange for paying just a few more pounds on the premium.

4. Be prepared to haggle

If you’re staying with the same insurer, you might be able to get a cheaper renewal premium for the same level of cover by haggling.

Check out our guide on haggling to ensure you get the best deal.

Best and worst car insurers

To help you find the best insurer, we’ve combined expert Which? analysis of 30 car insurance providers’ standard policies with feedback from thousands of policyholders to produce our unique car insurance reviews.

You can also find useful tips in our comprehensive car insurance advice guides and the video below.

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