‘Loyalty tax’ of £650m for car insurance

DRIVERS are paying an annual ‘loyalty tax’ of more than £650million by letting motor insurers renew their policy automatically, a report says.

It found a third of drivers allow this to happen without shopping around, and 70 per cent of these saw their premiums rise as a result.

Six in ten motorists chose their current insurer because they offered the cheapest deal, the comparison website Moneysupermarket found.

But for those whose policy was automatically renewed, premiums rose by £50 on average – amounting to a total of £652.5million a year.