14:27 04 March 2013
Phrases like 'earn £300 in 10 minutes' are usually found taped to lampposts at roundabouts, or in dodgy sidebar advertisements online - but when it comes to renewing your car insurance, there's a genuine way of putting hundreds of pounds back in your pocket.
If you've ever simply renewed your car insurance automatically with an existing provider, there's a good chance you paid more than you actually needed to for cover. In fact, motorists are wasting £2billion a year by staying loyal to their existing insurer, according to Money Supermarket research.
So can you earn £300 in 10 minutes? Your insurer certainly can if you're not savvy enough to shop around for cover each year, so read on as we explain how to make sure that doesn't happen.
Statistics from research are all well and good, but I've seen how much there is to be saved first-hand after a minor collision saw my renewal quote double.
A few years ago I was stunned when my renewal letter came through from my insurer. Earlier in the year I bought cover from this big-name insurer for around £600, but after a minor bump in the August of that year, they jacked up my renewal quote to £1,200 come December.
As this was my first ever accident, I wondered whether this was typical, and so I ran a quote on MoneySupermarket's car insurance channel, including the details of the recent accident to see if other insurers would penalise me as badly.
Lo and behold, there were a number of well-known insurance providers who were willing to offer me cover back down at the original price of around £600, with the minor collision having little-to-no impact on my premiums.
So, in effect, I earned (or at least didn't fork out) around £600 by rejecting my insurer's renewal quote and shopping around for cover elsewhere.
Throwing better deals away
I'd always shop around come renewal time, having learned a valuable lesson from my experience a few years back. But it seems a lot of people are happy to waste money by automatically renewing their policies with their existing insurers.
The MoneySupermarket research I alluded to earlier found that seven million (19%) motorists automatically renew their insurance each year without first shopping around. What's worse is the fact that 11% don't shop around because they don't think they can save money, while two million others (6%) simply can't be bothered to shop around.
These motorists are throwing better deals away, because there's plenty of evidence to suggest you'll get a better deal by switching your insurance provide each year. On average, there's £300 to be saved each year.
Pete Harrison, car insurance expert at MoneySupermarket said: "Motorists don't even need to 'drive' a hard bargain; on average there's £300 cash up for grabs to those who don't just accept the renewal price generated by their car insurance provider."
"No matter where you live or how old you are, it's vital to do your homework at renewal time, as searching for a better deal doesn't cost you anything and there is much to gain. It takes about five minutes to check if there is a cheaper policy out there to suit your individual needs."
Disloyalty is rewarded
Growing up, we're all instilled with a sense that loyalty is important - it's something we value in others and strive for ourselves, and the insurers love it too.
Research shows that the average motorist will stick with an insurer for 2.7 years. Drivers aged 55 and over stay loyal for even longer at 3.6 years, which either reflects the fact that price comparison websites weren't available for the majority of their lives, or that they're more loyal!
The fact is, insurers offer their best deals to new customers, so that they can grow their market share by attracting more people to their books. You can take advantage of this fact by making sure you're always a new customer, switching to a new provider each year come renewal time.
And remember, it's not just shopping around that will save you money. As Kevin Pratt explains in his article '10 car insurance essentials when you want cheap cover', you can lower your premiums by ramping up your security, keeping your mileage down and increasing your excess, among other things.
Whatever you do, make sure that you don't line your existing insurer's pockets when you could be lining your own. When your next renewal letter comes, find out how much you could save by switching to a new provider using our car insurance comparison tool here.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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