Drivers Pay £1.2bn A Year in Loyalty Penalty Charges
Most people lead incredibly busy lives these days, which is why it is not surprising many do not have the time to search for a new car insurance policy when theirs is due to end. However, not doing so could have serious financial consequences, with Britons paying an extra £1.2 billion a year in loyalty penalty increases.
This is according to recent research by GoCompare Car Insurance, which found 4.7 million drivers have been caught in the auto-renewal trap, typically paying £256 a year more by automatically having their insurance policy renewed instead of finding a better deal.
Indeed, drivers tend to stay with the same insurer for more than two and a half years, while 13 per cent have not changed provider for over five years, despite their bills being higher than new customers’.
Lee Griffin, chief executive officer and one of the founders of GoCompare, said the convenience of having insurance policies renewed “can come at a very high price”.
“Those who allow their policy to roll-over for another year can pay hundreds of pounds extra for the privilege,” he stated.
Drivers will want to tighten their purse strings even more so after comparethemarket.com revealed the cost of motor insurance has also increased by £24 in the past three months. This takes the average annual policy to £755, and this figure could be even higher for those who are automatically renewed.
Unsurprisingly then, the GoCompare study showed nearly three-quarters (73 per cent) of drivers are demanding more information about their renewal options, while 55 per cent want it to become illegal for insurers to charge existing customers a greater amount than new ones.
Those who do not need a vehicle all the time can save on insurance costs by hiring a van around Windsor whenever they do.Back to Latest News