A total of 17 million UK drivers let their car insurance renew automatically last year, overpaying a collective £830m as a result, analysis by MoneySuperMarket has uncovered.
The research found that 52% of motorists let their car insurance auto-renew in 2021, up 27% from the previous year. Premiums increased by £49 on average – up 17% from 2020 when drivers saw a typical rise of £42.
A survey of those who renewed their car insurance found that a quarter shopped around, but stayed with their existing provider for ease – up 20% on last year.
Over a tenth said that changing car insurance provider takes “too much time or effort”, and nearly one in five thought that there were no significant savings to be made.
This comes after the Financial Conduct Authority (FCA) introduced new rules at the start of 2022 intended to stop insurance companies hiking their prices every year.
“Last year more drivers renewed their car insurance with their existing provider than did not,” said Sara Newell, car insurance expert at MoneySuperMarket.
“With motorists reporting average premium increases of £49, this means that collectively, UK drivers overspent on their premiums to the tune of an estimated £830m.
“While we have seen the introduction of the FCA’s new rules on price walking – which are intended to level the playing field for consumers – it’s important that drivers don’t rely on such measures to reduce their premiums.”
Regionally, drivers in London reported the biggest average rises to their premiums at £79, followed by those in Northern Ireland and the West Midlands, on £61 and £60, respectively. Welsh drivers saw their premiums increase the least.
Despite FCA rules intended to ensure providers highlight a customer’s previous year’s premium price against their renewal price, 48% of drivers did not recall seeing these notifications.
Of the 52% that did, 72% said that they did not encourage them to shop around.
“We’ll monitor the impact of the FCA’s new measures over the coming months, but the fact remains that shopping around is always going to be the most effective way of keeping your costs down,” Newell added.
Image credit: iStock
Author: Chris Seekings