The dangers of auto-renewing your car insurance

Staying in the same lane might be costing you dear. We explain why auto-renewing might be a massive drain on your finances.

Promoted car insurance logo

Get cheap car insurance quotes

  • Save up to £258 on your car insurance*
  • Compare over 100 insurance providers
  • Enjoy rewards
Get a quote

Auto-renewing your car insurance seems like an obvious and easy option. Why waste time looking for a new deal, when you’re happy with the one you’re on?

Sadly life and insurance isn’t that simple. Your blind loyalty could be costing you hundreds of pounds.

Fortunately, there are ways to fight rising auto-renewal costs.

Auto-renewing car insurance dangers

Higher prices. Loyalty doesn’t always pay. In 2016 a UK report calculated the total amount of money that insurance customers wasted by accepting the auto-renew price they received from their provider. In total, about £1.3 billion went to insurers when customers could have shopped around.

Doubling up. With some insurers you need to call to cancel. If you don’t realise this clause is in your contract, you may go get an insurance policy from a different provider, then one morning wake up and gasp in horror when you see you’re paying for two policies!

Going uninsured. Some people think their car insurance will just rollover. In some cases it doesn’t. This can be a massive problem if the unwitting, uninsured driver then gets into an accident or stopped by the police.

Why do insurance prices go up even if you don’t claim?

So you’ve been a safe and responsible driver. No claims on your record. Meanwhile, you’ve stayed with the same insurer so you feel your loyalty should be rewarded.

Then you get your auto-renewal bill and shock sets in. It seems ridiculous but your premium has gone up drastically.

Well, there are literally dozens of factors that impact your insurance quote, including your age, the area you live in, driving experience, occupation, your claims history, your credit score.

So a life change like moving house might suddenly force your premium up or down. If your new area is rife with car crime then the insurer may hit you with higher fees.

Yet there are external influences too. Your provider may have had a jump in claims over the last year, which it might have to offset by charging other customers more.

Or, it might even be part of your insurer’s business plan to put up the auto-renewal price in the hope that you’ll forget to investigate other options, fail to act quickly enough or simply pay it because you think it’s easier.

Asking for a discount

If you’ve been driving responsibly then you could well ask for an insurance discount. Here are some steps you could take.

1. If you receive an insurance quote you think is unreasonable, search online for cheap car insurance deals.
2. Find three different quotes and contact your insurer. Call, chat on their website, send an email or write a letter.
3. Ask if it can give you a better offer. Insurance companies know attracting new customers is harder than keeping existing ones, so it might dangle a carrot for you to stay.
4. If your insurance company turns you down, look elsewhere. Other insurers might entice you with discounts and a better premium. At the very least compare your options and get some quick quotes online.

What if an insurer mistakenly renews your contract?

Immediately get in touch with your provider and explain you weren’t aware your policy would be automatically renewed. You’re within your rights to ask for a refund too.

To avoid the hassle in the future though, it’s worthwhile really scanning the Terms and Conditions so the insurers don’t catch you out again! When you agree to the deal, make sure you read up on cancelling during the cooling-off period and look up any cancellation fees.

Ways to lower your auto insurance costs

  • Telematics policy. Fitting your car with a black box which measures your speed, distance travelled, and what time of day or night you drive can cut your costs.
  • Higher excess. Your excess is the amount you’ll have to pay should you make a claim. By taking on a higher excess your premium will be lower. However, make sure you can afford to pay it should anything happen.
  • Pay annually. Paying a one-off annual fee is typically cheaper than paying monthly. This is because you might be charged interest on the instalments.
  • Your car. The make and age of your car will impact how expensive your premium will be. If you’re buying a new vehicle, it’s worth researching for one that insurers approve of.
  • Mileage. If you limit your mileage you could pay less on your premium. Take a train on a really long distance trip perhaps? Or walk to the shops instead?
  • No claims discount. Drive safely and avoid making any claims and you should be rewarded. Although loyalty doesn’t always equal reward. Sometimes you have to look to another provider.

Frequently asked questions

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.
*51% of consumers could save £257.97 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next three cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from January 2021 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.

More guides on Finder

  • Car insurance for 20-year-olds

    Find out the average cost of car insurance for a 20 year old and how to save on your premiums.

  • Junior SIPPs

    The guide discuses the pros and cons of junior SIPPs, and why kick-starting your child’s pension early can reap substantial rewards.

  • SIPP withdrawal rules

    We outline your SIPP withdrawal options and whether you should opt for an annuity, flexible drawdown or take your whole pot in 1 go.

  • How does retiring or moving abroad affect my pension?

    In this guide we explain everything you need to know about how retiring abroad affects your state pension and private pensions.

  • Workplace pensions

    Tax relief and employer contributions mean that saving into a workplace pension is an invaluable way to bolster your retirement income.

  • Pension auto enrolment

    Find out what you need to know about your auto enrolment into your workplace pension scheme.

  • How to consolidate pensions

    Moving multiple pensions into one scheme could cut costs and save time. We explain the pros and cons of consolidating your pension.

  • Defined contribution pension schemes

    Defined contribution, or money purchase, pensions are the most common way to save for retirement. Here’s what you need to know.

  • Compare business charge cards

    Find the best charge card for your business.

  • What is the triple lock on pensions?

    We delve into what the triple lock on the state pension means, why it may be removed, and the possible consequences for pension recipients.

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site