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Why can't I get a deal on car insurance?

woman car driverAs Skinted Minted often points out, shopping around before renewing your insurance/utility contract is a good idea. So then why doesn’t it work for me? Actually, that’s not fair: I saved 30% by shopping around for my home insurance earlier this year – see here. But on car insurance, it’s a different matter. For the second year running, my renewal quote from my existing insurer is lower than I can find on a comparison site. It’s only a matter of a few pounds, but still: why doesn’t shopping around work on my car cover? Why aren’t insurers lining up with great deals to tempt me away from my current insurer?

My renewal quote is £234.97 for fully comprehensive cover. That’s 82p less than last year. Inflation over the year has been around 2% so given that my premium is lower, I’ve done well. But on the other hand my car – a nine year old Honda CR-V, basically a solid, reliable bus – has fallen in value. And in addition, I’ve had another year of no claims. Indeed I have never claimed on car insurance and I’ve been driving for more than 30 years. I am surely a car insurer’s dream: a middle aged woman driving a boring car not for business purposes; living in a low crime area and parking my car off road.
And according to the most recent AA British Insurance Premium Index, car insurance premiums fell in the three months to 30 June 2018 thanks to “intense competition”. Certainly I do pay less than many others. Indeed, the average premium according to the index was £648.10 “a whopping £78.83 cheaper” than a year earlier. So why am I not benefiting from ‘intense competition’? I think it’s probably because I’ve hit a floor – basically insurers don’t want to offer policies for a low premium, even if I’m a good risk. And I don’t want bells and whistles on my insurance – such a legal insurance – and I don’t want to pay monthly: see Jane’s blog from earlier this year here to see why insurers really like it when you don’t pay all in one go.

That’s why insurers aren’t trying to tempt me to switch and why my existing insurer doesn’t feel the need to slice my premiums to keep me. However, next year I will again attempt to shop around for a better deal: after all, it’s not difficult. I’d just add that it’s better to check out a comparison site before you turn down your renewal quote. This is because if you turn down your renewal quote only to find it’s better than you can get elsewhere, your former insurer may not be so keen to offer you the original deal. And remember, not all insurers are on comparison sites: which just makes shopping around even more complicated.
See our guide to car insurance here

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Monday, 17 December 2018