Drivers who auto-renew pay on average £42 more for their car insurance

Drivers that auto-renew their car insurance policy see an average price increase of £42, according to MoneySuperMarket, with around one in 10 drivers being hit with an increase between £51 and £75.

In a poll of 2000 UK adults the price comparison site found 41 per cent of drivers let their car insurance policy renew automatically. Drivers that did so saw their premiums increase by £42 on average.

One in five saw jumps between £26 and £50, while nearly one in 10 (9 per cent) saw rises between £51 and £75 and a further 8 per cent were charged between £76 and £100 more than the previous year.

Eight per cent of drivers allow their insurance to renew automatically without shopping around for a cheaper deal, with a fifth (20 per cent) staying with their existing provider for ease. A tenth (12 per cent) believe changing car insurance provider is too much time or effort, and a further 13 per cent don’t believe there are significant savings to be made.

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MoneySuperMarkets says that this equates to 17.1 million drivers letting their car insurance auto-renew last year at a cost of £720 million (41 per cent of UK drivers is 17.1m, multiplied by £42 equals £719,770,548).

The Financial Conduct Authority’s (FCA) transparency in insurance renewals rules that came into force in 2017 are intended to encourage drivers to shop around by highlighting the previous year’s policy price against their renewal price. Despite this, half (51 per cent) of drivers don’t recall seeing these notifications. Of those that did see the notifications, a third (31 per cent) said that it didn’t encourage them to shop around.

Kate Devine, car insurance expert at MoneySuperMarket, commented: “If your policy is coming up for renewal, you should always shop around to see what deals are on the market - a new deal on your car insurance is very easy to find online and could save you up to £218.”

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Last month, a MoneySuperMarket study also discovered that drivers who renew at the last moment overpay by an average of £200, with car insurance premiums rising by 17 per cent when the policy reaches its final 24 hours.

It always pays to shop around for an insurance policy rather than auto-renewing with your current policy provider. In September 2020, an FCA investigation found that some insurers were charging existing customers who were more likely to renew more for car insurance than new customers - a process commonly called ‘loyalty tax’.