EXPERTS have revealed drivers are losing out on hundreds of pounds by committing a car insurance mistake – here’s how to get a lower price.
Motorists can be left out of pocket if they stick to their old provider when renewing their car insurance.
1
Experts are urging car owners to always compare their premiums with other insurers as it is not always the best price they can get.
Companies can offer more expensive prices to their loyal customers while giving the best deals to the new ones.
Although the City watchdog tried to put an end to the so-called loyalty penalty, research shows old customers are still paying more.
Which? money editor Jenny Ross said: “Our latest research has found existing customers still face financial disadvantages compared to new customers.
“The price quoted by your insurer is not necessarily the best price you can get.”
They found one in five customers renewing their policy said they compared their insurer’s renewal offer with quotes it gave if they applied as a new customer for the same cover.
And half of these motorists said they were offered lower prices when they posed as a new customer.
Due to the current FCA’s rules, insurers can charge different prices based on the method of purchasing.
Customers renewing a policy over the phone could get a better deal if they purchase online instead.
To avoid paying hefty prices, car insurance experts advise to always haggle with providers before accepting a quote.
Mr Ross added: “With household budgets under huge strain at the moment, and car insurance prices at record highs, it’s important not to renew your policy without first checking if you could pay less.”
Even if you are looking to renew with you current insurer experts recommend to give them a call to negotiate.
Once you get the overall cheapest price you can contact the insurance company to see if they can beat or match it.
The FCA explained: “While charge different prices based on the firms have a duty to ensure renewing customers are offered a fair price, we’d still advise people to shop around to get the best deal.”
It comes as the Association of British Insurers revealed car insurance premiums were at their highest level on record.
The latest figures from the Association of British Insurers show prices went up by 29% between the third quarter of 2022 and same period in 2023.
The trade association said the average price for motor insurance was a record £561 between July and September 2023.
Meanwhile, separate research from Compare the Market reveals young drivers are being hit particularly hard.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.