MARTIN Lewis has revealed how getting organised when it comes to your car insurance could save you hundreds of pounds.
Speaking on his weekly MoneySavingExpert ITV show, the finance guru urged drivers to take advantage of the so-called 21-day rule to save up to £500.
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Martin said: “The 21-day rule is if you’re coming up for renewal, that is the sweet spot to get your new quotes because insurers think you’re low risk.
“But if you leave it until the last moment they think you’re a higher risk and the price can go up 50% or more.”
One viewer said she had saved £500 by renewing her insurance early.
Another fan tweeted that she had saved £220 on her car insurance.
According to GoCompare, you can buy your next car insurance policy up to 29 days before its start date, and this will let you lock in the price you’re quoted on that day.
That’s important, because if you just shop around but don’t buy, you could find the price has changed if you come back at a later date.
Ryan Fulthorpe, car insurance expert at GoCompare, said: “A lot of people may not realise that insurers can change their prices at any time, and that the price they are quoted one week could well have changed when they return to buy the exact same policy a week later.”
GoCompare said customers who buy their insurance up to 26 days ahead of its start date can save as much as 40% compared with buying it on the day itself.
Fulthorpe added: ““A good rule of thumb is to put a reminder in your diary a month before your car insurance expires and start shopping around then if you want to save money on your renewal, therefore.”
Martin Lewis has recently urged people to shop around for car and home insurance, even if they’re not up for renewal too.
A new set of insurance rules come into force from January 1, which could leave many people worse off.
New rules will mean that insurers must offer new customers and existing customers the same price for their policies.
Historically, customers who stayed with the same insurer year after year would endure hefty price hikes and be penalised for their loyalty.
Meanwhile, new customers would take advantage of cheaper deals as insurers tried to entice them to switch.
Now could be a good time to shop around for insurance anyway, as car premiums have fallen to a six-year low.
Costs have come down because there were fewer accidents over the past year through the Covid lockdowns.
A fall in the number of whiplash claims has also helped bring prices down.
While the new rules aim to level the playing field, Martin has warned that in reality it means prices are likely to rise across the board for new customers.
He said: “My guess is firms won’t just cut renewals to match newbies’ prices. They’ll drop ‘em somewhat and increase new customer rates – meeting in the middle.
“While the new regime officially starts in January, as it’s a big job, insurers will likely start to shift pricing algorithms sooner, so the clock is ticking and the cheapest prices may start to disappear within weeks or months.”
He said insurance customers should start shopping around now, and might even be better off cancelling their existing policy and locking in a new deal before prices rise.
If you are considering this, be sure to check for any exit penalty charges that could negate the price saving.
Other tips to get the best car insurance deal include tweaking your job title.
You should also be sure to shop around using comparison sites such as GoCompare, Confused.com, and Comparethemarket.
We’ve rounded up nine of the best ways to cut car insurance costs.
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