Are You Getting Fair Auto Insurance Prices At Renewal?

Auto-renewing your car insurance may be costing more than you think, we look as whether you are getting fair auto insurance prices at renewal.

There are certain points in the year that fill us with dread. Many tend to come with some kind of financial strain or stress attached to them. One that never seems to go well is the day that your auto-renewal quote for your car insurance arrives. Many of us will go through the same process each time. We sigh, open the envelope, read the new annual cost and resign ourselves to this new amount. We have grown used to the fact that our quotes rise each year. That is the price to pay for the renewal service. However, it doesn’t have to be that way.

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The truth is that there are some misconceptions and falsehoods in the car insurance industry that force us to pay more than we should. Loyal customers are tricked into paying over the odds for new quotes because they are so reliant on this auto-renewal scheme. Yet, a quick comparison for some car insurance quotes can change all that. In this guide, we will show you the pitfalls of the auto-renewal system and the way you can renegotiate a better deal via quotes. We will also look at some top tips for using these comparison sites to your advantage for cheaper car insurance quotes. First of all, let’s look at the hidden dark side of auto-renewal systems.

Auto-renewal Often Seems Like the Easiest Option

The idea here is that this is one less hassle to worry about when it comes to sorting out your finances. The company will handle everything for you and you will just continue your insurance plan with no fuss. This is especially appealing for anyone that lacks the confidence to deal with these sorts of transactions. We trust the company to do the right thing and don’t pay too much attention to the consequences.

However, there is another side to the auto-renewal system where:

  • Customer loyalty means very little
  • Auto-renewal prices are inflated beyond reasonable rates
  • Convenient Direct Debit payments can make the situation worse

Don’t Expect Customer Loyalty To Get You Far

There is the expectation – no matter the industry or product – that consumers will get better rates and more perks for long-term service. We expect that our car insurance costs will decrease over the years because the company knows us, trusts us and – to be honest – owes us for that loyalty. However, the reality is much different.

It is also easy to get drawn in by all those lines about everyone’s rate rising in line with modern times. Costs are increasing nationally, regardless of specific factors in the policy, so we should all expect to pay accordingly. This generalisation is designed to make it easier for us to accept those price rises. If a 25% increase for the year is the same for everyone, then what do we have to complain about? Well, the answer here is that there is a lot to complain about. While loyal customers with auto-renewal see a price hike, new customers get competitive rates and perks.

The truth is that car insurance companies tend not to reward the loyal if they can help it. Loyalty isn’t an important trait here. Instead, they have a habit of taking advantage of them wherever possible. Customers become caught in a trap of paying the same amounts over and over again. Our blind faith in the company means that they can charge whatever they want without too many questions. As a result, consumers pay over the odds for their service.

This is an even bigger issue for anyone that pays via Direct Debit. This system should be the most reliable and convenient. A lump sum is taken each month at a scheduled time and you don’t have to think about it that much. The trouble is that this means we don’t always see exactly how much is taken out. Direct Debit may also lead to some hidden fees and extra costs.

Fair Auto Insurance?

It is easy to believe that we are getting the best possible deal when the reality is much different. It also doesn’t help that so many companies are failing to show transparency about their rates. Companies should inform customers of their previous premium rates, the new price and clearly show the increase. The problem is that this will expose the system and force customers to look elsewhere. Therefore, many companies simply said out the new quote with minimal information to keep customers trapped.

This Is Why It Is So Important That You Get A Car Insurance Quote

Once you start asking around and shopping for deals, new opportunities become available. There are many cases where consumers have carried out a little research into their situation and found that a new customer would receive a significantly cheaper plan than they would for the same car. In the best cases, a current provider may simply offer a better option because of your query.

There is an old saying: “if you don’t ask, you don’t get”. This is something that we don’t always take advantage of because we don’t want to seem rude or arrogant about the situation. However, this passive alternative just leads to years of being walked over by major companies. Ask them what is the best they can do.

  • Are you really still getting the best deal available?
  • Are there any perks that reps failed to tell you about?
  • Why are new customers getting such a better deal?

This could all lead to a simple transaction to rectify the issue and lower your costs. Of course, there is another negotiation trick to play in this situation. Tell them that you are considering other companies to get a better deal. This may give them the kick they need to keep you on board. They may suddenly find a deal or get a managers approval to fix the problem.

Finding A Cheaper Deal With Your Current Supplier

This is something that happens more than you might expect. Insurance companies seem to have two different games running at the same time. On one side, they have this promise to beat competitors, provide cheap deals and draw in new customers. On the other, they have the team that works with existing customers and seems determined to squeeze every last penny from them. It seems like the two sides are never meant to meet.

Reapply With A Clean Slate for the Best Outcome

If you are starting over and applying as though you were a new customer, take some time to tweak your application. There is a good chance that by renewing each year, you have dead weight on the policy holding you back. The plan you got 5 years ago may not apply to your needs and circumstances today. Look at the following factors for the best result:

  1. Think about the proposed mileage. Are you going to use the car as much as you previously claimed? Could you reduce that number?
  2. How many drivers are on the policy. Perhaps when you started with this provider the household was different. Maybe you had a child living at home that would borrow the car a lot and has since moved out. Do they really still need to be on the policy full-time any more?
  3. Look into ways of decreasing the quote by making the car more secure. Again, you may have already done this since you first signed up but never declared it.

When a loyal customer gets a quote as a new customer, this is when the discrepancies appear. Companies have no choice but to offer the lower deal once confronted on it. Those discrepancies are also often much larger than you would imagine. There are cases where a renewal quote may double the previous annual sum, yet a quote on a comparison is less than the previous amount.

The alternative is to consider switching to a different insurance provider entirely.

By this point, you are setting up a scheme as a new customer whatever plan you get. It could take as much effort to switch as it would to negotiate with your current supplier. Take some time to sign up with a comparison site to see what cheaper car insurance quotes you get.

There are two ideal outcomes to watch out for here. The first is a cheaper quote from the company you are already with. You can show them this result on these third-party sites and question their policies. The other is a cheaper quote from a rival. You can take this to your current provider and see if they will either match or better the price to stop you from leaving. There may even be some small print in your contract somewhere that says they will do this.

This is sure to happen with several companies so make sure you compare your options carefully before choosing a deal. Be careful when comparing policies to make sure that you have a like-for-like cover.

Should You Stay Or Should You Go?

Now you have a game plan. You have a quote from a company that is more appealing and an auto-renewal plan from your current provider. If your provider isn’t able to meet or better that price for you then you have something better to switch to. Call your provider, tell them the situation and precisely what you want. Either they give you the price quoted or you leave.

Be aware that your current provider might not make it easy for you to leave. Some consumers feel a little as though they are trapped with their current plan. The lack of communication and transparency makes it difficult to get through sometimes. It is also surprising how few companies have an online process for this. Customers are still left on hold on phone lines to call centres. The idea here, it would appear, is to make the process seem like more hassle than it is worth. Those that persevere can eventually get through and make some changes. The company will start to negotiate at this point. They will try and keep you with whatever tools they can rather than see you leave for a competitor.

With that in mind, there are some tricks of your own to consider to lower the costs:

  1. Use some of the factors mentioned above for that new application. Discuss named drivers and mileage with the customer rep as bargaining chips for that better quote.
  2. Mention your no-claims bonus. This is something that we sometimes forget about. But, what is the point of it sitting there without actually acting like much of a bonus?
  3. Haggle. Whether you are an existing customer or a new customer, there is nothing to lose by haggling a bit. You may be surprised how quickly a sales rep with drop the price with a little persuasion.
  4. How to make the most out of a comparison site when getting a car insurance quote.

The best comparison sites for cheaper car insurance will have links to the most appropriate, affordable solutions and effective search tools. Comparison sites are also especially helpful for the young – those under 25 – and seniors. Both age groups are at high risk and may incur higher rates due to liability. You can compare policies carefully to find the best fit. But, there are downsides to this approach.

This is why it helps to shop around and go door-to-door sometimes. Use every available tool at your disposal to find plenty of auto insurance quotes to compare. Work with the comparison site for a clear summary of your options. Then do a simple online search for other companies that fit your needs. You may come across one that is a household name that, for whatever reason, chooses not to be a part of that comparison system. Alternatively, you may find someone new you’ve not heard of with a great plan that ticks all the right boxes.

Not all listings are created equal on these comparison sites. This helpful new tool isn’t as neutral and customer-driven as you might hope. Some cheaper car insurance companies will get their time to shine as a top pick. However, this is rarely down to customer satisfaction or good deals. Chances are that they paid for this spot as a form of advertisement. These comparison sites are out to make money too.

Another tip to keep in mind here is to save your details with the comparison site for a later date.

Unfortunately, this isn’t a one time fix. This is something that you will probably have to do year after year. There is a vicious cycle here. Companies send extortionate auto-renewal reminders to customers. Customers then search for car insurance quotes and haggle for a better deal. They either stay put or try somewhere else. A year later, another overpriced auto-renewal letter comes through the mail. It doesn’t matter if you stay put or switch – the cycle will continue. Therefore, it helps to save your details with the comparison site to save time in the future.

You may also find it helpful to start researching before your next policy runs out. If you give yourself more time to prepare, you might have a more stress-free, fruitful experience.

In Summary

Auto-renewal isn’t the convenient, beneficial solution that you may believe it to be.

It is easier in the short-term to agree to the companies first offer. Yet, that offer isn’t their best deal and was never intended to be. These schemes will always take advantage of loyal customers in favour of new ones. That is why it pays to act like a new customer and beat the company at their own game. Sometimes all it takes is is one search for a quote and one phone call. As soon as you show them you are wise to their games and know you can get something better, they are usually willing to give in and make that deal.

Car insurance quotes are more of an effort. This is the longer way round to what should have been the initial outcome. Yet, it is worthwhile for the savings you can make – not to mention the sense of satisfaction of beating the system. Get some auto insurance quotes from rival companies and your current provider as a new customer. Either result should be the ammunition you need to get a better quote. Also, don’t expect this to be a one-time issue. Chance are that they will try this trick again next year. Be prepared, do your research and get the best deal you can.

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