Money expert Martin Lewis has issued what he called a ‘perverse warning’ to anyone with car insurance.
The Money Saving Expert founder, returning on The Martin Lewis Money Show Live on ITV1 and ITVX on Thursday, February 13, warned his viewers that they could be paying over the odds when they come to renew because of changes in the car insurance industry.
He said that on the whole, prices have dropped, which would appear to be a good thing, but many people as a result are accepting quotes at the same price at their renewal – which given that prices are down, is actually a bad thing.
Martin explained: “Car insurance prices have dropped.
“So they’re down 16% year on year. But if you still look where they were in 2021, about £500 on average, they’re still over £800 now.
“So they’re 60-70% up on where they were.
“So why am I warning you that prices are down?”
He continued: “It’s very simple. What I’m hearing a lot these days is that when people do their renewal, they’re so used to prices going up, when they get a renewal that’s the same price they go ‘yaaay, my renewal hasn’t gone up, I’m sorted’. No. If your renewal is the same, the market has dropped 16%, you’re paying too much.
“Even if it’s a little bit cheaper, you’re paying too much. So my warning is against complacency.
“If you’re getting a renewal and it’s not giving you a good saving on what you were paying, well I’d always say don’t auto-renew, don’t settle, combine comparison sites because they serve different insurers and they have different deals even from the same insurers. It’s worth doing, and the perfect time to get your quotes is 26 days before the renewal.”
Martin then set out that this 26 days figure is a very literal one, and you should be doing your renewal quote exactly 26 days before your car insurance is due to expire.
He added: “Literally, insurers price it cheaper because the people who price it at that point are likely to be a lower risk than the people who leave it to the last minute.
“Between 20 and 30 days is fine, 26 days is the perfect sweet spot and we’ve done 5 million quotes to work that out. Get that in your diary now because sometimes they won’t give you a renewal notice until two weeks before renewal, but you want to do it 26 days before renewal, and don’t be complacent if it comes in and it’s the same price. You get why it’s a perverse warning? Good stuff.”
