Last minute insurance renewal adds hundreds to premiums
Insurance prices can be £338 cheaper when drivers switch three weeks before renewal, compared to the day the policy expires.
The research by Comparethemarket.com revealed that the cost significantly increases as you get closer to the end of your insurance term.
For drivers switching on the day the policy ends, they can expect to pay an average £775, compared to £436 three weeks earlier.
Switching two weeks before renewal costs an average of £472 for cover, £547 a week before and £660 the day before.
Despite the rising costs, consumers are found to leave things to the last minute as Comparethemarket.com said 35% of inquiries come on the day before and the day of a policy ending.
The graph below shows average premiums at varying start dates before renewal:
The comparison site also found that average premiums in December are higher than any other month of the year. Drivers renewing this month are forking out an extra £75 for cover.
Dan Hutson, head of motor insurance at Comparethemarket.com, said: “The cost of a policy is very fluid and reflects the level of demand in the market at that moment, along with a variety of factors based on a person’s risk profile.
“In December, when most people aren’t thinking about insurance, the demand is a lot lower and so insurers seem to charge much higher prices. This then dramatically reduces in January as providers look to attract customers again when they start looking at their bills after the Christmas break.
“The same goes for switching providers around the end of a policy. Very few people get ahead of the game when it comes to reviewing their insurance policies, but these figures show there is a big financial incentive in considering the time that you switch. Shopping around remains by far the best way to save money on insurance, but these statistics show that this can be optimised by timing it correctly.”