Here’s Why January Is The Best Month To Renew Your Car Insurance

Car insurance is rarely cheap. But the overall cost is largely determined by when you renew your cover. Here’s why you should do it ASAP…

When To Renew Your Car Insurance 

New research conducted by CompareTheMarket has revealed when’s best to renew your car insurance policy. For instance, renewing three weeks before a policy is due to expire saves an average of £339. Meanwhile, those who renew on the day of renewal fork out £775; meaning they’d have paid £436 if they’d sorted it just three weeks earlier. Despite this enormous savings potential, most motorists have subscribed to a culture of the last minute; only approaching the issue when they absolutely have to. Some 35% of them wait until the day before their policy expires before getting another quote. Only 3% of drivers searched three weeks in advance. That said, drivers can also sort their insurance too early. Premiums leap to figures in excess of £500 when searched for four weeks in advance.

Dan Hutson, head of motor insurance at CompareTheMarket, acknowledged the fluidity of pricing but stated that it wasn’t coincidental. He explained, “the price of insurance goes through extraordinary fluctuations throughout the year, but not by coincidence. The cost of a policy is very fluid and reflects the level of demand in the market at that moment, along with a variety of factors based on a person’s risk profile”.

The Best Time Of Year To Get A Quote

CompareTheMarket’s research didn’t just work out when’s best to renew an insurance policy in relation to expiry; it also looked into the best time of year. December is the worst time of year, coming with the highest premiums. Between 2015 and 2016, December premiums were (on average) £100 more. January is the cheapest by a significant margin, from then on premiums rise over the course of the year. But what’s the rationale for this? Supply and demand, as Hutson explained. He said, “in December, when most people aren’t thinking about insurance, the demand is a lot lower and so insurers seem to charge much higher prices. This then dramatically reduces in January as providers look to attract customers again when they start looking at their bills after the Christmas break”.

So, there you have it. If you want a good premium, get a quote three weeks before your policy is due to expire; although not earlier. In addition, try to do it in January or earlier in the year. In addition, it’s worth mentioning that loyalty goes unrewarded in the car insurance industry; ‘loyal’ customers almost always face higher premiums as providers prey on their idleness and lack of research. Shop around, shop early and save money on a policy that’s right for you and your driving.

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