Drivers urged to act quickly to get best deals ahead of car insurance law change
Changes from January 2022 could see the end of discounts aimed a new customers
New figures show that insurance premiums are, on average, more expensive in December but new laws around policy pricing could mean a jump in bills from next month.
Buying your car insurance at the right time and shopping around has been found to offer savings of up to £300, with 20 days before renewal identified as the “sweet spot” for the cheapest quotes by comparison site Compare the Market.
It found that drivers who wait until the last minute before choosing a new policy face quotes that are, on average, £306 more than those who look for a quote 20 days in advance - £707 compared with £401.
Despite this, its data also shows that more than half of drivers leave it until the week before renewal before they start shopping around and a third of searches take place on the final day of a policy.
This year, though, new legislation designed to protect customers is complicating matters further.
Figures from the last eight years show that prices are usually cheap in the first three months of the year, steadily rising through the year to then spike in December, when they are £50 more expensive than the cheapest month.
However, the site’s experts are warning that this coming January could bring a shock for some motorists as rules designed to protect loyal customers could affect those shopping around for a new insurer.
The new regulations from the Financial Conduct Authority ban insurers from offering any special deals exclusively to new customers. This will mean existing customers will be able to get the same price as any new customer. However, rather than extend special offers to existing customers, insurers are expected to simply end discounted premiums designed to lure in new customers.
Ursula Gibbs, director of comparethemarket.com, commented: "While motor insurance has typically been cheap at the start of the year, 2022 could be different. With a major regulatory rule change fast approaching, the cost of insurance could increase significantly next year. If your policy is due to auto-renew in the next few weeks, you may be better off switching sooner rather than later."