How to switch car insurance

Need better cover? Or just want a better price? Our step-by-step guide to switching car insurance tells you everything you need to know.

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You’ve been with your car insurer for coming up to a year (or even longer), and your current policy’s about to expire. The question is: should you stick with your existing provider, or switch to a new one? The only way to find out the best option for you is to shop around and compare deals. Whether you end up switching or not, it could save you a bundle. This guide explains when it might be better to renew or switch car insurance, and what to look for.

What is “switching” car insurance?

This may sound like a question with an obvious answer. But, just for the sake of clarity, “switching” is the term often bandied about for cancelling your car insurance with one provider and immediately starting a policy with a new insurer. You may also come across the term “transferring” your car insurance. This is usually used when you keep your policy with your existing provider, but transfer it to a different car. For example, if you sell your old car and buy a new one.

When should I think about switching car insurance?

Most standard car insurance policies last for 12 months (or occasionally 10 months, in the case of no-claims bonus accelerator policies). For most people, the best time to think about switching car insurance is shortly before your current car insurance policy is due for renewal. At this point you have two main options:

  • Renew your policy with your existing provider. It’ll send you a renewal quote a few weeks before your current policy expires. If your policy is set to auto-renew, you don’t need to do anything. Your insurer will take the renewal payment from the card you used when you first took out the policy. Otherwise, you’ll need to contact your insurer to make the renewal payment.
  • Switch to a new provider. If you’re not happy with your existing provider, or its renewal premium, you can make the switch to coincide with when your current policy expires. In fact, it’s worth looking into this option even if there’s nothing wrong with your existing provider and its quote. You never know whether there might be a better deal available.

There are a couple of other options too. One is to simply cancel your insurance without switching or renewing. You should only do this if you don’t plan to carry on driving, though, either because you’re getting rid of your car entirely, or you are declaring your car “off the road” through the official SORN process.

The other option is to try and negotiate a better deal with your existing provider. More on this later.

Why should I switch my car insurance?

There are many general reasons that we’d recommend shopping around for car insurance every time it’s due for renewal.

  • You might get better service from another insurer. Common issues with customer service include too little or too much communication, problems when making a claim, unhelpful customer support or difficulties with offshore call centres.
  • There may be perks on offer from a different provider. You may be eligible for discounts or other benefits that your current insurer doesn’t offer. These could be multi-policy discounts for getting multiple products from the same insurer, freebies that come with a new policy, periodic bargains or anything else that looks tempting.
  • You could save money. This is probably the most important reason to consider switching, even if nothing about your circumstances has changed and your current insurer is perfectly fine. New brands enter the market all the time, and offering low prices is a great way for them to steal customers away. It’s reasonable to assume that there’s almost always a more competitive deal somewhere. You just need to find it.

In what circumstances should I particularly prioritise switching car insurance?

As well as the general reasons why it’s a good idea to compare prices annually, there are a couple of specific drivers that could make it particularly worthwhile.

1. Your situation has changed

Have you changed car? Moved house? Got a new job? Picked up a few points on your licence? Your insurance may have been great value for money for your circumstances at when you first took it out. But insurers all weigh up risk factors slightly differently. Another insurer might be better if life has moved on.

The same applies if you want to add a new named driver to your policy. A son or daughter who’s recently passed their driving test, for example. Car insurance for young drivers is notoriously expensive, so it’s wise to look around for a provider that won’t cripple your bank account if you add your child to your insurance.

2. It’s been years since you last switched

Following rules introduced in 2021, car insurers are no longer able to charge loyal customers more than new ones – doing away with a big chunk of the so-called “loyalty penalty”. Despite this, loyalty doesn’t usually pay. A combination of you being too busy to shop around and your insurer gradually increasing prices over time could mean you’re now paying substantially more than you would for equivalent cover from another provider.

How much could I save by switching car insurance?

Being able to go online and compare car insurers means that you can save a lot of money by playing the field. According to February 2024 data from insurance price benchmarking expert Consumer Intelligence, many customers could save more than £500 by switching their car insurance. You might not save quite this much, depending on your circumstances and your current premiums. But even £50 or £100 is a worthwhile saving at a time when pressures on the cost of living are causing many to feel the pinch.

Whether you switch or not, other ways you can save money when renewal rolls round include:

  • Reviewing the features of your current cover to make sure it’s still fit for purpose. Maybe you’ve had a son or daughter as a named driver on your policy while they lived at home but they’ve now moved away. If so, removing them could bring premiums down a fair bit. Or you may realise your car is overvalued on your current policy (i.e. the replacement value of your car may have decreased). Making sure your details are up-to-date will help you avoid paying too much.
  • Tweaking the excess. Choosing a higher voluntary excess will result in lower premiums. Just don’t set it so high that it becomes unaffordable to make a claim should you need to.
  • Pay the full annual premium up front if possible. Insurers apply interest if you pay in monthly instalments. You’ll usually end up paying less if you’re able to pay in full up-front.
  • Add an experienced driver. Adding a lower-risk, experienced named driver to your policy could lower your premiums. The benefits can be biggest if you’re a young and inexperienced driver. But even those who’ve been driving for a few years might be able to use this tactic to bring costs down.

Are there any downsides to switching car insurance?

Provided it gets you a better deal, there are very few downsides to switching car insurance. It’s pretty straightforward and could save you money each year.

There are a few things to consider, though. These aren’t outright blockers, but could sway you against making the move just yet.

The first is that you may simply like your current insurer enough that saving a few quid doesn’t justify the risk of moving to an unknown provider. Perhaps your current provider has been particularly supportive at helping you through a claim, for example. Sometimes decisions are all about the bigger picture, rather than purely saving money.

Switching insurer can also get a bit more complicated if you have an unsettled claim with your current provider, regardless of how it’s handling it. If the decision hasn’t yet been made on who is at fault in a claim, you and any other driver involved will have “joint liability”. This can temporarily mean that your no-claims discount is up in the air, resulting in higher premiums if you shop around for quotes. If you do decide to switch, make sure you update your new insurer with your correct no-claims discount as soon as the claim has been resolved.

And there’s also a bit more to weigh up if you cancel mid-way through your policy term, rather than at the point of renewal. You’re likely to have to pay a cancellation fee to your existing provider. You also risk losing any no-claims discount you’ve built up over the months since you last took out a policy.

Step by step: how to switch car insurance

  1. Time it right. The best time to switch is when your current policy is coming up for renewal. This will get you the most value out of your old policy and you won’t incur cancellation fees.
  2. Get car insurance quotes. Do this about 2-3 weeks ahead of when your insurance is due for renewal, as quotes tend to creep up the closer you get to your renewal date. Shop around using at least 1 comparison site (different sites sometimes have different deals with insurers) as well as insurers that aren’t on comparison sites, such as Direct Line.
  3. Compare policies side by side. Quality of cover matters as much as price. So, once you’ve shortlisted a few deals you like the look of, check the small print carefully to make sure that you’re getting the level of cover you need, and that you won’t be missing out on any desirable features offered by your existing policy.
  4. Have a final sense check. Take a beat to make sure that the savings and other benefits you’ll get from your chosen deal are enough to justify the switch. Take into account any cancellation fees you might incur if you’re leaving your existing provider early.
  5. Try negotiation (optional). If you want, and are happy with your current insurer other than the price, try using your research to haggle with your current insurer.
  6. Make the switch. Sign up for your new policy and cancel the old one. Notify your current insurer that you will not be renewing your old policy. Read your policy details or contact the insurance company to familiarise yourself with the cancellation process. Some insurers let you cancel renewal by phone, or using your online account. Others may require that you inform them in writing. Make sure that your new policy is set to start as soon as the old one lapses, so that you don’t risk driving uninsured. Most insurers let you sign up for a policy a few weeks ahead of when it actually starts.

Who’s the best insurer to switch to?

There’s no easy answer to that, as the best-value insurer for one person might not be the best for another. That’s because every insurer has different underwriting criteria. Some may treat younger drivers more favourably, while others might be better for those who live in urban areas. One thing we would say: don’t base your switching decision on price alone. Make sure any new policy you look at offers the right features and the right levels of cover, as well as a decent price.

If quality of cover and service is important to you, check out our guide to the best car insurance companies. We’ve surveyed hundreds of customers to find out how happy they are with their providers. We’ve also given comprehensive policies a policy score for the level of cover they provide, and picked out policies that excel in specific categories like multi-car or for young drivers.

How much does it cost to switch car insurance?

If you’re switching at the point of renewal, changing car insurance shouldn’t cost anything. Once your policy term has completed, your contract has been fulfilled and your existing insurer can’t charge you to leave them.

If, on the other hand, you’re switching part way through a policy term, you can expect to pay a cancellation fee of up to £25 within the first two weeks, or up to around £60 if you cancel later.

Can I negotiate a better deal with my current insurer rather than switching?

Danny Butler

Finder insurance expert Danny Butler answers

If you’re considering switching but haven’t made the decision yet, let your current insurance company compete for your business.

Simply letting your insurer know thinking of switching and asking for a better deal might get you one. But you might have a higher chance of success – and of a bigger discount –if you’ve done your research into what competitors offer first. Here’s how to prepare for the discussion with your existing insurer.

  • Check your current coverage levels. What other perks do you get, such as no claims bonus protection or breakdown cover? You’ll need this information so you can get like-for-like quotes.
  • Decide on any changes you might want to make. You might be prepared to ditch an optional extra in order to reduce premiums, for example.
  • Get quotes from competitors. Check comparison sites and direct-only insurers to see if you can get equivalent cover for a better price.
  • Call your current provider. You can try contact forms and online chat, but it might be more effective to negotiate verbally if you can. Go armed with competitor quotes, remind your insurer how you’ve been a loyal customer, and ask if there’s any way to match the competitor quotes you found. Or, if they can’t bring down their premium as low as you’d like, ask if they can throw in any optional extras you’re interested in.
  • Be prepared to call their bluff. If you don’t get anywhere with the first person you speak to, you could try asking to speak to the cancellations team. It shouldn’t work this way, but sometimes insurers are more willing to negotiate if they think they’re in imminent danger of losing your custom.

If your current insurer won’t offer you a better deal or match a quote you’ve found, then it might be time to ditch them.

Can I switch car insurance part way through a policy term?

You can. But if you’re doing so purely to save money, make sure you take into account the costs involved in cancelling early.

You should get a pro-rata refund of premiums, less any days you’ve held the policy for. But cancelling an insurance policy mid-policy will almost certainly incur a cancellation fee. If you cancel within the initial 14-day cooling off period this is likely to be lower (probably no more than £25), and some insurers waive it entirely. But cancelling after this could set you back upwards of £50.

If you find a great deal that has all the features you need and will save you far more than the cancellation fee, then you might decide it’s worth sucking up these charges.

And, of course, some circumstances may force you to change insurers before your current policy expires. For example, a change in circumstances might mean that your current provider is no longer able to offer you cover – if you move or change car, and they don’t insure drivers in certain locations, or with certain models of car, for example. If you’re forced to switch insurer because your current provider can no longer cover you, ask it to waive the cancellation fee.

It’s also worth bearing in mind that if you switch part-way through a policy term, you will lose any no-claims bonus you’ve been building up since you took out the policy. That’s because no-claims bonuses don’t operate in fractions of years. You need to have accrued a full policy term of claim-free driving to benefit from another year’s worth of discount.

Steps to changing car insurance mid-policy

If you’re switching car insurance before your policy is over, follow these steps:

  1. Contact your current insurance provider or go through your policy details to find out what’s involved in cancelling your insurance mid-policy. You need to know how to cancel, when the cancellation takes effect, what the associated fees and costs are and whether you will get any refunds.
  2. Decide on your new policy. You should have a replacement policy that you’re happy with ready to go before cancelling your old one. Compare the savings or additional benefits of the new policy with the cancellation fees of the old one to make sure it’s worthwhile. Refunds usually take time, so don’t plan on paying for the new policy with a refund from your old one.
  3. Sign up for the new policy and then cancel the old one. If possible, try to have your new policy take effect as soon as the old one ends, without any gaps between.

Pros and cons of switching car insurance

Pros

  • Could save you hundreds of pounds on your renewal quote
  • May get you better customer service or more features
  • It’s usually free to switch, as long as you make the change at the point of renewal.

Cons

  • If your premiums are fairly low to start with, you might not think the savings are enough to justify the effort
  • Your current insurer may be willing to price-match the best deal you’ve found
  • If you switch part way through your policy term, you’re likely to incur cancellation charges.

Bottom line

It never hurts to shop around to see if there’s a better deal to be had. You could save a lot of money, whether that’s through going through with the move, or simply using your research as ammo for a firm conversation with your current insurer. If you do decide to switch, use our guide to the best car insurance companies to help you choose a provider that will deliver on quality as well as price.

Frequently asked questions

*Based on data provided by Consumer Intelligence Ltd, www.consumerintelligence.com (Mar ’24). 51% of car insurance customers could save £539.54
The offers compared on this page are chosen from a range of products we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations), aren't product ratings, although we always explain what's great about a product when we highlight it; this is subject to our terms of use. When making a big financial decision, it's wise to consider getting independent financial advice, and always consider your own financial circumstances when comparing products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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Written by

Ceri Stanaway

Ceri Stanaway is a researcher, writer and editor with more than 15 years’ experience, including a long stint at independent publisher Which?. She’s helped people find the best products and services, and avoid the pitfalls, across topics ranging from broadband to insurance. Outside of work, you can often find her sampling the fares in local cafes. See full profile

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