Motor Insurance – Buy or Renew at the Right Time
- August 7, 2018
- by Chris
A recent insurance analysis investigation has discovered what might perhaps be the best day to purchase a new car insurance policy, potentially saving you hundreds of pounds at renewal. This research was carried out by looking at the data of more than 12 million quotations. Taking out a new car insurance policy from a comparison website three weeks ahead of your start date may allow you to make a substantial saving. Taking out a policy closer to your renewal date can mean you pay a higher price whilst completing this process to early may even increase your premium by hundreds of pounds.
The analysis compared the raw data of more than 12 million quotes from January 2018 to May 2018 by some of the largest car insurance comparison websites. The range of data has a relatively similar correlation in pricing. It looked at the most optimised window to see which period had the biggest reduction when renewing a car insurance policy including the peak period of when the largest number of insurance providers offer quotations.
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Usually you are able to get a quote within 30 days of your renewal, but the data showed that buying your policy 21 days before cover is due to start may be the optimal window to see the biggest savings. Please note, your own quotation is specific to you and the individual circumstances can vary for each quote. The research was calculated from an average but the general consensus behind the results should still apply.
Chris: ‘Don’t wait until the last minute’
UtilitySavingExpert.com founder Chris Richards said: “Car insurance premiums are calculated by looking at a number of different risk factors that insurers use such as type of vehicle, location, age of driver, and NCD (no claims discount). We now believe that the date on which you get a renewal quote is also a factor”.
Where does this price difference stem from?
Your quotation is based on different risk factors, these include: the type of car you drive, where you are located and your driving history to name just a few. See our guide on car insurance for further information. An insurer looks at the level of risk involved. If you take out a new policy 21 days before your renewal, it can show that you try to be organised and maybe more careful, on the other hand, waiting until the last day may be seen as the complete opposite. Some insurers have stated that they see a pattern of drivers who make more claims can sometimes leave arranging their insurance closer to the renewal date. As for people who are obtaining quotes 30 days or more before their renewal date, not as many insurers will be providing a quote at this moment in time, therefore by having less options, some of the most competitive prices may be unavailable at this moment in time.
Does 21 days before renewing give me the best price?
Prices can often change so there isn’t a guarantee that 21 days will automatically give you the best price. It is still helpful to know which period to avoid when looking for cheap car insurance. Here’s three tips to help you get a cheaper premium:
• 60 days lock in quote: Some insurers will let you lock in an insurance quote 60 days in advance without the obligation to purchase. Locking in two to three quotes will help you set a benchmark price later on.
• Review your renewal price: Your current insurer will generally send you a renewal price 28 days before your renewal date, if you haven’t received it, contact them directly.
• Use a comparison website: Around 21 days before your renewal date, compare prices at Utility Saving Expert to see if you can find cheaper car insurance.
We hope you found this to be useful, for more helpful tips, check out our blog and be sure to follow us on social media for all the latest updates.