The best time to renew your car insurance is at least 2 weeks before the date of your renewal, according to research by NimbleFins. Those buying car insurance with a same-day start can pay 50% more than those buying ahead. The price of your coverage will drop the further in advance you’re able to purchase it, up to a point, so it’s definitely worth thinking ahead and getting everything sorted.
While only insurance companies themselves know for sure why this is the case, it’s probably fair to assume that more risk-averse drivers are likely to make sure everything is ready well ahead of time. As such, insurers view drivers who are well prepared as considerably less risky than somebody who leaves things to the last moment.
Also, insurers can charge a premium for people buying last minute as they may have no other option but to take the policy, especially if there is a journey they need to make that day. Insurers are ultimately in the business of making a profit, so it probably isn’t surprising that they take advantage of drivers who may require a policy urgently.
Many insurers won’t sell you a policy more than a month in advance, and past the two to three-week mark the benefits wear off and average prices generally remain similar. Remember that every insurer has a unique way of working out the cost of your policy, so check a few different starting dates to get an accurate idea of how that insurer specifically reduces their costs the longer in advance you book.
How do car insurance companies determine rates?
Car insurers use a number of complex methods to determine how much they should charge a driver for their car insurance. While it isn’t the most exciting thing in the world, understand why insurers charge you what they do can help you to better identify ways to save money, which is almost always worth your time.
Insurers consider a number of factors about you as a driver when quoting you a price. This includes things like your age, vehicle, years of driving experience and for what purpose you’re using your vehicle. Then, they assign a value of risk to that factor, depending on their own experience insuring similar drivers and other insurers experience on the market.
As an example, a car insurer may find that you’re 50% less likely to be involved in an accident as a 45-year-old driver than as a 25-year-old driver. As such, the car insurer may offer a considerably discounted price to the older driver, as they believe he is less likely to be involved in an accident.
This is just one completely hypothetical example of how a factor can impact the price. It could still, in theory, be possible for the 25-year-old driver to get a cheaper quote – consider, for example, if he was driving a Toyota Prius, and the 45-year-old was driving a Ferrari F8 – the insurer would have to take this into account too, so it starts to become clearer that insurance rates are an amalgamation of a number of different data points, where some are more important than others but all ultimately contribute.
When can I renew my car insurance?
You should be able to renew your car insurance any time in the month leading up to your renewal date. You may find your current insurer contacts you ahead of time to offer you a new policy or a continuation – if you are happy, that’s great, but it is always worth shopping around to see if you can take advantage of any special offers.
You’ll save a considerable amount if you’re able to renew 2+ weeks in advance, so put a reminder in your calendar for when your renewal is coming up so you can stay on top of it and give yourself time to shop around. The later you leave it, the more expensive it’ll become, so you’ll want to try and get it sorted as early as possible.
While it can feel like a pain to have to renew your coverage, it’s absolutely imperative that you do. Being on the road without a valid insurance policy is illegal in the UK, so make sure you’ve got a new policy sorted before your old one runs out.
How to renew car insurance
If you’re happy with your current provider, then renewing your policy shouldn’t be an overly complicated task. Almost all insurers will be happy to retain your custom, and most have a rollover clause in contracts to allow policies to be automatically renewed without the need for excessive amounts of additional paperwork.
It isn’t the case for every insurer, but some insurers (such as Hastings Direct) may charge you a small rollover fee – most do not, however.
In terms of process, your insurer should be in touch to remind you your policy is due for renewal (and will probably offer you a continuation/new policy while they do so). Renewal shouldn’t be too complicated, and the insurer will take care of most of it, likely only requiring you to reconfirm your details and sign a contract to put your new agreement into place.