Want cheaper car insurance? Be prepared to haggle

Car insurance prices are creeping up again, with the average annual premium now £2 higher than it was a year ago, at £566.  

If you're looking to beat the trend and get a better price for your insurance without switching provider every year, simply asking for a price cut is a good place to start. 

While it isn't guaranteed to work, our latest survey found that two thirds of drivers who discussed their price with their car insurer were offered a better price as a result. 

Here we break down how success rates vary by insurer, how much you stand to save, and how to haggle like a pro.

• Find out more: What's happening to car insurance premiums?

Need car insurance?

Use our customer scores to help you choose a great deal at MoneySuperMarket.

Compare deals

The insurers most likely to reduce their prices

In April, we surveyed thousands of car insurance customers and asked them about what they were paying and their experiences negotiating their premiums, if they'd attempted it. 

Overall, two thirds of policyholders said they were offered a reduced price if they contacted their insurer to discuss their premium. Our table shows how haggling success rates varied between six major companies. 

How much you can save by haggling

Nearly six in 10 respondents in our survey said they'd contacted their insurer to discuss prices. Most were offered reductions.

On average, customers paying annually reduced their yearly premium by £60. Those paying in instalments saved an average of £21 per month. Some saved much more.

• Find out more: How to find cheap car insurance

Price reduction or a 'true' discount?

Importantly, not all customers who succeeded in lowering their prices received full discounts in the truest sense of the word. 

Getting a lower price can mean, for example, that the insurer advises you on which parts of your policy you can tweak or remove - for example, increasing the excess or ditching breakdown cover - to make the policy more affordable.

However, 58% of customers who had been offered a price reduction said they'd not needed to tweak their policy for the lower premium.

How easy is haggling?

Insurers don't shout about haggling. Last year, when we asked 25 insurers if they were receptive to negotiating prices with renewing customers, only 12 said they might: fewer still explicitly said actual discounts could be provided, such as a 'valuable customer discount' or discounts 'to reward customer loyalty'. 

Nonetheless, despite the insurers' reticence to advertise the process, nearly two thirds of customers said that they'd found the process of discussing costs with their insurer easy.

Is haggling fair?

The experience of those in our survey suggests that those accept their insurer's renewal offer without challenging it are likely to be paying more than they need to. 

Admiral and Hastings Direct had the highest proportions of customers obtaining lower prices after contacting them. We put to them that these high price-reduction rates (72% and 68% respectively) suggested their initial offers often weren't their best prices - and asked if they considered this to be fair on customers who don't haggle.

Hastings Direct quibbled with our definition of 'haggling'. It said it doesn't haggle or negotiate with customers, but that 'where customers have shopped around (which we encourage them to do) and found a better price, we are able to consider offering a lower price.' It went on to say: 'This is not decided by our customer service agents but is calculated by whether we can afford to reduce our margins to sustainably retain that customer.'

Admiral said its renewal prices were fair and accurate based on customer details, but where things had changed or the customer was unhappy with renewal terms or had found a cheaper quote, it could apply discounts 'where appropriate.'

Discounts are a tool to retain customers that look like they might otherwise go elsewhere, and this cost of retaining them is factored into insurers' pricing more broadly. 

In other words, if you're not benefiting from a discount, you're probably paying for someone else's.  

• Find out more: Best car insurers

How to haggle like a pro

In our survey, some 62% of people who haggled said they found it easy. Here's how to do it:

1. Note how this year's price compares to what you were offered last year. This information should be stated in the renewal letter. 
2. Check what other insurers are offering. Have a look at prices on a comparison website (or ideally, several). Focus on policies similar to yours, and include your existing insurer in the search. If it sent you a renewal offer a week ago, its prices might have changed since - or if you bought your insurance on the phone, it could be cheaper online. This information should reveal how competitive your insurer's offer actually is.
3. Now it's time to contact the insurer. Ask whether it's prepared to discuss your renewal price. If you've seen you could do better by going elsewhere, tell them about the alternative quotes you've found. If your renewal price went up, ask them to explain why. Be polite - the person on the other end of the phone hasn't set your price.
4. They'll either offer a revised price or tell you the offered one was final for the cover. You'll need to decide if you're happy with it. If you're prepared to switch, let the call handler know this is your plan. This could nudge them, or their cancellation team, into offering a discount to retain your business.   

First in Which? Money magazine

This story first appeared in Which? Money magazine. Join for reviews and investigations, plus 1-to-1 guidance from our experts.

Join Which? Money

Only £49 per year