Choosing the right time to buy your car insurance could save you time and money. Find out when’s the best time to buy from our car insurance expert, Rebecca Goodman.
Passing your test and getting your first car is a huge life achievement and brings with it a lot of freedom. You’re no longer relying on public transport or someone else for lifts; you’re free to drive wherever and whenever you like.
But before you send that group WhatsApp and start planning an epic road trip with your mates, you’ll need to buy car insurance, and, we’re sorry to say, it’s the most expensive for younger drivers.
How much is car insurance for young drivers?
On average, an annual car insurance policy will cost £2380.73 for those aged between 17 and 24. That’s compared to £540.83 for those aged between 45 and 64. (Source: Data from Quotezone.co.uk uses a random sample of over 100,000 UK car insurance policies from January 2023 – September 2024.)
Luckily there are lots of ways to cut your costs, whether you’re buying insurance for the first time or renewing. In this guide, we’ll look at the best time to buy insurance, explain how you can find the cheapest policy, and provide our top tips for lowering your overall driving costs.
How does car insurance work?
You’re legally required to have car insurance if you’re driving in the UK, and you’ll need to buy a policy before you hit the road.
There are lots of different policies to choose from, so it’s worth comparing costs and insurers before clicking to buy. Channel your inner Goldilocks and look for the one that’s just right.
If you already have car insurance, you can either renew your policy when it’s about to end or you can cancel the policy and start a new one with a different insurer.
Is it a good idea to auto-renew with car insurance?
If you’ve set up your car insurance to auto-renew, that means it’ll renew automatically.
Insurance policies typically last for 12 months, so just before yours is about to end, you’ll usually receive an email or phone call from your insurer. They’ll let you know how much it’ll cost to renew your car insurance and the date your new policy will start.
There are a few perks to auto-renewing, not least that it takes the hassle out of looking for a new policy. You can sit back, relax, and let the insurer do their thing. However, that convenience can come at a cost. There’s always a danger with auto-renewal that you’ll end up paying more, as it’s sometimes cheaper to switch insurers.
The best way to find out for sure is to compare prices – both the price your current insurer is offering you and the prices others are charging to new customers – and then pick the one that’s best for you.
Why can the cost of car insurance increase at renewal?
In 2022, the Financial Conduct Authority (FCA) banned insurers from charging customers more at renewal than they would charge new customers. However, the price still might go up at renewal.
Your insurer will contact you to tell you the new price (if you choose to stay) and the price you paid last year. The difference between these two figures will let you know how much you might expect it to change next year and how much more (or less) you’ll need to pay for your policy.
Why is it cheaper to renew my car insurance earlier?
Sometimes, it pays to be organised. Car insurers price their premiums based on risk and how likely someone will make a claim. They think that drivers who sort out their insurance earlier (rather than leaving it to the last minute) are likely to be more responsible and a lower risk than those who buy it a few days before.
This is sometimes called the 21-day rule for car insurance, and it’s the reason why it can be cheaper to buy car insurance if you do it around a month before your policy is due to expire.
In fact, the cheapest day to buy car insurance is around 20 to 27 days before your renewal date. There is a big difference in the cost, too, with a saving of around £1, 371 on average for those who buy it 26 days before the renewal date. This applies whether you’re renewing your car insurance or buying it for the very first time.
(Source: MoneySuperMarket data, which looked at over a million different car insurance quotes)
How can I find the cheapest car insurance?</h2
The best way to cut the cost of car insurance is to shop around and compare prices. Never be tempted to buy the first policy you receive.
Using a comparison website is a quick way to do this but not all insurers are on them.
Once you’ve found a policy, remember to check the small print. We know, it’s not exciting but it is important. The price offered might look appealing, but the policy is pointless if it’s not right for you and your car.
A few other tips for cutting the cost of car insurance include:
Paying a higher excess
Sometimes if you offer to pay a higher voluntary excess this can lower your premiums.
Pay in one go
If you can afford it, paying in one go instead of monthly is cheaper as with monthly payments interest is added.
Consider telematics
Also known as black box technology, with this type of insurance, if you can show you’re consistently driving well your insurer may lower your insurance bill. But be aware that if you don’t drive safely, it could go up.
Security features
Your insurance might be cheaper if you have certain security features installed such as anti-lock brakes or theft devices. Before getting something fitted, always check with an insurer to see how much difference it might make.
How do I cancel my existing policy?
Never just cancel your direct debit when you want to cancel a car insurance policy. Sorry, but you’ll probably need to pick up the phone for this one. You’ll need to contact your insurer to tell it you’re leaving. At this point, you might be offered a cheaper deal and it’s entirely up to you whether you take this or leave and start a new policy with a different insurer.
