if you’re renewing your car insurance policy in 2022, your insurer will no longer be able to quote you a higher price than an equivalent new customer – but you might still benefit from shopping around and switching.
Here, Which? offers a step-by-step guide to renewing your car insurance as well as tips on cutting the cost of your premium.
Car insurance ‘loyalty penalty’ banned
New rules introduced on 1 January mean drivers can no longer be stung by ‘price walking’, a practice where insurers increase premiums every year for loyal customers, while offering new customers cheaper prices.
The change should make insurance pricing fairer, but it could also mean that premiums across the market rise, with drivers encountering smaller savings when they attempt to switch to a new provider.
- Find out more: car insurance loyalty penalty ends
Get a great deal on car insurance
Getting a cheap car insurance deal can be tricky, but we’ve partnered with Confused.com to help you compare policies and buy insurance from one of their 100+ providers.
How to renew your car insurance
1. Study your renewal quote
Generally speaking, your car insurance policy will renew every 12 months. Your provider should send you a renewal quote around a month before your policy is due to renew.
The new rules mean that your provider won’t be able to quote you more than they’d charge a new customer, but that doesn’t mean your price won’t go up compared to last year – and it also doesn’t necessarily mean you won’t be able to get a better deal by haggling.
2. Look on price comparison websites
With dozens of providers out there, there’s still a very good chance that switching to a new insurer will get you a cheaper price.
Price comparison websites are a good place to start, as they allow you to compare deals from lots of providers in one swoop. It’s a good idea to start looking around three to four weeks before your renewal date, as prices tend to increase as the clock ticks down.
To get started, you’ll need to input your car and driving licence details, along with your claims history, details of any no-claims discount and your estimated annual mileage.
- Find out more: how to find cheap car insurance
3. Get quotes from insurers that offer direct deals
Not all insurers list their deals on price comparison websites, with policies from big players such as Direct Line and NFU Mutual only available directly.
To get a full view of your options, it’s worth getting quotes from these providers separately and comparing them to those you found on price comparison sites.
Aside from the vehicle and your claims history, the level of cover you choose can also have a major impact on your quote.
Third party only covers damage to other vehicles, third party, fire and theft also covers your car if its stolen or damaged by fire, while fully comprehensive also covers damage to your own vehicle in an accident.
Confusingly, fully comprehensive cover can sometimes be cheapest, as less comprehensive policies are most commonly bought by drivers who claim more or younger drivers looking to reduce the cost of their premiums. With this in mind, it’s worth checking the price for each level of cover before proceeding.
5. Choose a deal
If you’re using a price comparison website, you’ll usually select a deal by clicking through to the insurer’s website to confirm your details and pay for your policy.
At this point, it’s important to check and double check the details you’ve inputted so far and read the insurer’s list of ‘assumptions’, which you’ll need to agree to before confirming the policy.
Before choosing a provider, check out our best and worst car insurance rankings to find out which insurers combine great coverage with top customer service.
6. Consider whether add-ons are worth the money
Comprehensive insurance policies don’t cover every eventuality, and the quotes you’ll see on price comparison websites are usually for the insurer’s standard policy.
Common add-ons include legal expenses insurance, personal accident cover, key cover and breakdown cover. Before selecting these, consider whether they’re worth the additional cost, or if you’ve already got coverage elsewhere.
For example, breakdown cover is commonly bought seperately from car insurance and is included in some packaged bank accounts, while key cover may be included in your home insurance policy.
- Find out more: car insurance add-ons explained
7. Make sure you cancel your auto-renewal
If you’re moving to a new provider, it’s important to call your current insurer and inform them you’re leaving and that you don’t want your policy to renew.
This is crucial as many insurers auto-renew policies as standard, so if you don’t call them to let them know you’re leaving, you’ll be charged for another year automatically.
Tips to cut the cost of your premium
Pay annually rather than monthly
Insurers will usually let you pay annually or monthly for your policy. Paying monthly will allow you to spread the cost over the year, but you’ll pay extra for doing so.
By paying monthly, you’re effectively taking on a loan from the insurer, meaning you’ll need to pay interest. If possible, pay up-front or consider using a 0% purchase credit card if you want to spread the cost but avoid interest.
Consider a different excess
When you make a claim on your insurance, you’ll need to pay an amount towards the cost. This is called the excess.
Insurers commonly offer excesses such as £100, £250 or £500 on their policies, and choosing a higher excess could cut the cost of your premium. Be careful, though, as setting the excess too high may make claiming too expensive.
Add named drivers
If you’re considered higher-risk by insurers (for example if you’re a new driver), adding someone with more experience (such as a parent) as a’named’ driver can bring your premium down.
One word of warning – don’t put additional drivers down as the main driver to cut costs. This is illegal and can result in your policy being invalidated.
See if a black box could cut your costs
Another way for younger drivers to cut their premiums is through black box insurance.
This involves the insurer installing a GPS device in your car to monitor your driving and ensure you adhere to certain rules – for example driving at specific times of day, not exceeding a set mileage limit, and keeping your speed down.
Look into multi-car insurance
If there’s more than one car in your household, it’s worth thinking about a multi-car insurance policy.
These policies allow you to link your vehicles together and can sometimes come with significant savings.
We’re working with Confused.com to help you get a great deal on your car insurance. Search for a new policy now.
Which? Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665 and is an Introducer Appointed Representative of Inspop.com Ltd for the introduction of non-investment motor and home insurance products (FRN 610689). Inspop.com Ltd is authorised and regulated by the Financial Conduct Authority to provide advice and arrange non-investment motor and home insurance products (FRN310635) and is registered in England and Wales to Greyfriars House, Greyfriars Road, Cardiff, South Wales, CF10 3AL, company number 03857130. Confused.com is a trading name of Inspop.com Ltd.