UK Drivers overpaying on car insurance by £2 billion
Car owners need to be aware of a simple error that could mean they’re overpaying for their car insurance by an average £113 a year.
The same mistake is costing younger drivers three times that amount – and these are the drivers who can least afford to pay.
Research by comparethemarket.com shows that the average price of car insurance has risen by 39% over the past five years. A significant part of the increase is a result of changes across the board to rate calculations, and a hike in Insurance Premium Tax which has been passed on directly to motorists.
Average premiums in September-November 2018 were £744 a quarter: an increase of £12 over the previous three months.
Price increases are now generally holding steady, but consumers are still missing out on significant savings the could make every year.
What are we doing wrong?
The reason we’re losing out is simple. Inertia.
The car insurance industry continues to penalise current policyholders in favour of new customers. By failing to shop around, and compare pricing, mistakenly loyal customers fail to take advantage of welcome-aboard discounting.
As premiums have risen, so have the potential savings to be made.
We need to give up on loyalty and instead become fickle, shop-around customers. Setting a calendar reminder to check comparable insurance rates three weeks before our motor insurance is due to renew could be one of cheapest and most effective savings we make this year.