Auto-renew a £1.3bn rip-off

Research has shown an estimated 23% of drivers – that’s more than six million motorists – auto-renewed last time around. Each paid up to £113 more.

The simple fact is if you are an existing customer you will get a raw deal compared to a new customer who is insuring their car for the first time with a new provider.

A new customer will often pay £200 less than an existing one for an identical policy.

So it’s easy to see why you should always shop around at renewal time instead of blindly accepting your current insurer’s offer – this is one time where loyalty rarely pays.

But it’s not just about the cost of your policy when it comes to this shoddy practice. If you allow your insurer to auto-renew your policy but don’t check to see whether key features of your cover have been altered, or don’t tell your insurer of changes to your circumstances, such as getting points on your licence, you could find your cover is no longer valid.

So even if you do decide to let the auto-renew go ahead, always check the small print.

The good news is that the rules are about to change. Insurers will soon have to advise you of the price you paid last year compared to the new price.

My advice is to shop around to see what better deals you can get, but don’t leave it too late and always make sure you have sufficient cover for what you need.

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