Research from Confused.com suggests that drivers who began shopping for car insurance roughly 28 days before their policy renewal date paid, on average, £542 less than those who waited until the last moment. This finding highlights the financial benefits of early action and suggests that most drivers are missing out on considerable savings.
Insurance companies often view early shoppers as lower-risk clients. As such, they are likely to offer better rates to those who plan ahead, considering them more responsible and less likely to file a claim. As policies approach their renewal date, prices tend to rise due to increased competition among insurers, who assume that late renewers are less likely to shop around.
Why Early Renewal Can Save You Money
When it comes to securing the best deal on car insurance, timing matters. According to Confused.com, drivers who secured their insurance quotes 28 days before renewal paid £511 on average. In contrast, those who waited until the day of renewal were quoted £1,052, more than double the price. This discrepancy underscores how much the timing of your renewal can affect your premium.
Several factors contribute to this price difference. Early shoppers are perceived by insurers as more responsible, while those who leave it to the last minute are viewed as more likely to accept the renewal terms without comparison shopping. Insurers may raise prices in anticipation of this, assuming the motorist is less likely to switch providers at the last minute. Market competition also plays a role: with more time to assess their options, insurers may offer better rates to early planners to attract their business.
Furthermore, research from Go Compare supports the idea that buying insurance about a month ahead of the renewal date tends to result in significantly lower premiums. Their findings suggest that agreements are, on average, 28% cheaper when secured 26 days before renewal.
The Sweet Spot for Savings
The “sweet spot” for securing the best rates is generally considered to be around 26 to 28 days before your current policy expires, according to Money Saving Expert’s Martin Lewis. Speaking on ITV’s Martin Lewis Money Show, he stressed the importance of shopping around during this time frame to secure the best possible deal, based on millions of quotes from various insurers.
The timing of a renewal also impacts more than just the price. While a few extra days either side of the 28-day mark may not make much difference, the key is to avoid the rush of last-minute renewals. Insurers often increase their prices as they approach the renewal date, anticipating that many customers will either renew without shopping around or settle for less competitive offers.
In light of this, drivers who start comparing quotes early can avoid paying over the odds. Although other factors, such as your car’s security features or accurate mileage, can also help reduce premiums, timing remains one of the most straightforward ways to secure significant savings. By acting early, drivers can avoid the price hikes that often accompany last-minute renewals and lock in a better deal with minimal effort.
