Car insurance trick that can save you £40

Wait till a week before deal runs out

MOST motorists know that you have to shop around to get the best deals on car insurance.

But new research for the Daily Mail has revealed another tip that can boost the amount saved.

Savvy motorists who sort out their package just a week earlier than they need it can slash almost 8 per cent off their annual bills.

Insurers say they give customers better prices if they renew early because people who are more organised are less likely to miss any payments.

Customers who shop around and then renew their car cover at least seven days before it expires can save £41 on a policy costing £534, according to the research.

But there is little financial benefit to doing it any earlier than this, the figures showed. And do not leave it until the last minute, as renewing one day early shaves only £12 off your annual premium.

The figures, provided by price comparison website GoCompare, reveal the hidden saving for the first time. However, only motorists who shop around for a new deal will benefit.

It is further reminder to customers who automatically renew with their existing provider that they are hurting their own pocket as they are frequently charged hundreds of pounds over the odds.

Matt Oliver, car insurance expert at GoCompare said: ‘This is a little-known trick that could drive down your premiums at a time costs are increasing – but many people don’t know about it. Being organised and getting your car insurance sorted early can not only mean you are charged cheaper premiums but also, you are not rushing around at the last minute to find a policy so have plenty of time to compare prices.’

A spokesman for insurance giant LV= said: ‘Customers who buy in advance statistically pose less risk, so they get cheaper premiums. It’s definitely worth planning ahead.’

It is estimated that customers who automatically renew their policies with the same firm are being fleeced out of £1billion a year by car insurers.

One in five of Britain’s 29.6mil- lion motorists let their policies roll over each year – meaning they are at risk of missing out on the best deals and instead pay far over the odds.

Last December – after years of campaigning by Money Mail – City watchdog the Financial Conduct Authority said insurers would have to remind customers of the cost of their previous years premiums when they are sent a renewal quote. The shake-up, which aims to encourage customers to shop around, will come in next year.

Car insurance premiums have rocketed 20 per cent in the past year. A typical annual comprehensive policy bought by a driver who shops around for the best price now costs £715, compared to £600 this time last year.

Male drivers have been worst hit. In June the average premium paid by men had jumped to £756, whereas women pay £664 – a £92 difference.

Older drivers have also been hit hard with an annual rise of 24 per cent. But a driver aged 61 will still pay only £418 a year compared to the £2,013 bill facing a typical 17-year-old.

The cost of insurance has crept up since former Chancellor George Osborne hiked the tax charged on premiums from 6 per cent to 9.5 per cent in November last year.

‘Definitely worth planning ahead’