Car insurance is usually one of the most expensive aspects of owning a car. However, as having at least third-party car insurance is a legal requirement to drive a car on UK roads, it cannot be avoided.
What you can do though is try to find ways to make your premium lower and easier to manage. One of the ways you can do that is to renew your car insurance at the ideal time. We’ve done some research to find out when that might be.
Most car insurance policies offer annual cover. This means they start on the date you choose, and expire exactly a year later.
Lately, more insurers have started offering rolling monthly contracts, but the majority still stick to an annual renewal date.
This means that, on the date your policy expires, you are no longer covered and driving your car on the road becomes illegal.
Some car insurance providers auto-renew your car insurance when your policy expires, which has its pros and cons. They must tell you in advance if they are going to do this, and give you the chance to opt out. If your policy isn’t set to auto-renew, you must either proactively renew your policy before it expires, take out an alternative one or register your car as SORN (off the road).
There is no definitive answer to this. However, most agree that renewing before the last minute can save you a lot of money.
Savings estimates vary, but recent studies have found that renewing your car insurance at least a couple of weeks before your existing policy expires could save you anywhere between 17% and 42%, compared with leaving it until the day it expires.
We did our own snapshot check of the cheapest time to renew. We used a popular price comparison site to get a quote for comprehensive cover for a 30-year old, VW Golf-driving teacher from London 4 weeks, 3 weeks, 2 weeks 1 week and a day before their existing policy expired, plus on the day of expiry.
We found that the “sweet spot” for the cheapest premiums was 2-3 weeks ahead of the renewal date. After this, premiums started to creep up. They were most expensive the day our policy expired. Our fictional driver could have saved £136 (12%) by renewing at least 2 weeks in advance compared with waiting till the day of expiry.
A touch surprisingly, though, our (admittedly snapshot) research found that it probably wasn’t worth getting quotes any earlier than 3 weeks ahead. The cheapest quote was actually marginally higher 4 weeks in advance.
What we definitely wouldn’t recommend is to automatically renew with your existing provider. Always have a look around and compare quotes to see if someone else can offer you the same (or better) policy terms for a lower premium. Even if you’d rather stay with your insurer, you can use this information to negotiate a better deal.
Your insurance company will post and/or email you a reminder that you need to renew your policy a few weeks before its expiry date.
If you are enrolled onto auto-renewal, you will get a notice saying your policy will renew on the stated date and the new rate of your premium.
In many cases, you will be enrolled onto the insurance company’s auto-renewal programme when you first take out your cover. This means your policy will continue with the same conditions as before. It won’t expire on the date stated in your policy documents.
It’s best to opt out of this or switch it off before the end of your policy term. You’ll often end up paying more for your policy if it renews automatically.
Note that if you cancel after your policy renews, you may have to pay a cancellation fee if you then decide to change providers. So make sure you do your research early.
You can usually renew your policy by contacting your insurer directly. The methods available vary by company, but most offer a customer service phone line and email address for customer queries.
In an increasingly digital world, many insurance companies now offer online portals or handy phone apps, where you can manage your policy. You should be able to renew through these services.
That said, consider shopping around for a better deal before you renew with your existing provider. Even if you don’t actually want to switch, you can use the prices you found to negotiate with your insurer.
Yes, as stated above, renewing early can save you money.
Opinions vary on the exact date, but around 3 weeks before the policy’s expiry date seems to be the best bet. If that sounds a little too early for you, anything over 8 days early can also save you some cash.
Your car insurance is affected by a variety of factors. This means your insurance company might not be able to price your renewal correctly if you try to renew too far in advance. Typically, you’ll find that you won’t be able to get quotes for more than 30 days in advance of your existing policy expiring.
Some might argue that shopping around for car insurance every year is a hassle. If you’re happy with your existing insurer why bother? After all, as the saying goes, if it ain’t broke don’t fix it.
We say that just because something “ain’t broke”, doesn’t mean it can’t be improved upon. Auto-renewing with your existing provider may be the easy option (and sometimes the best option). But sticking with the same provider year on year could be costing you a pretty penny.
Your current insurer may have offered the best combination of price and quality of cover when you first took out its policy. But, even though insurers are no longer able to charge existing customers more than new ones for equivalent cover, that doesn’t mean that a different insurer won’t offer a better deal now. In fact, according to insurance price benchmarking firm Consumer Intelligence, those who compare and switch car insurance could save up to £407.
We think that’s worth a little bit of hassle.
Timing your car insurance renewal right can make a significant difference to your premiums. It pays to get comparing a few weeks in advance. You can renew your car insurance anything up to 30 days before your existing policy expires. It’s not the only way you can keep costs to a minimum, though. Head over to our guide on getting cheap car insurance for more expert tips.
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