HOUSEHOLDS are being urged not to fall for a common car insurance trick that means drivers pay extra.
Most car insurance policies run for 12 months, with a new price recalculated and sent out to drivers a month before the policy ends.
But auto-renewing your policy could see you paying more than you actually need to for the same amount of cover.
The best time to renew you car insurance is actually between 21 and 28 days before your current policy expires, according to recent figures from MoneySuperMarket.
The price comparison site said drivers who stay ahead of the game save £300 or more compared to people who buy a policy the same day their cover runs out.
That is because insurers tend to view drivers who compare premiums early as more responsible, which can translate into lower cost.
Alicia Hempstead, car insurance expert at MoneySuperMarket, said: “Your renewal notice usually lands around a month before your policy ends, and this is your window to act.”
Martyn James, consumer expert, added: “Research has shown repeatedly that the ‘sweet spot’ for negotiating reduced insurance is three to four weeks before renewal, with reductions reducing the closer you get to the renewal date.
“We can’t say definitively why that is, but for many insurers an early appeal against a quote suggests an organised, motivated and above all else, risk-averse customer.”
“These customers are more likely to actually go elsewhere and will have the time to do so. And, of course, insurers love customers who don’t like risk!”
With that in mind, it might actually be cheaper to shop around ahead of your renewal notice being sent out.
So, if you’re due for renewal next month, that means now is the time to start hunting for a bargain.
One way to shop around for car insurance is by using price comparison sites.
Sites such as GoCompare, MoneySupermarket, and Uswitch can help you find a better price.
You will need to enter details such as your registration plate and where you live.
Factors such as where you live, your age, your occupation and whether you have been involved in any crashes may also impact your premium.
It is not uncommon for car insurance prices to vary a lot between providers.
With that in mind, it may be worth comparing multiple car insurance quotes to find the best deal for you.
How much does car insurance cost?
New data from the Association of British Insurers (ABI) showed the average motor premium has fallen by £56 over the past year.
Between July and September, the average motor insurance premium was £551 – £13 lower than the previous quarter and £56 lower than the same period in 2024.
The ABI’s motor insurance premium tracker is based on prices paid by motorists rather than quotes and analyses nearly 28million policies sold per year.
Motor insurance premiums have fallen each quarter so far in 2025, both on a quarterly and an annual basis.
Although premiums have eased from their peak, claims pressures remain.
Its members paid out £3 billion in car insurance claims during the third quarter of the year.
Repair costs accounted for around two-thirds (64%) of the claim figure, as the complexity and cost of fixing modern vehicles remains high, it added.
Chris Bose, director of general insurance policy at the ABI, said: “Three straight quarters of falling motor premiums will be welcome news for drivers and the industry alike.
“However, these continue to be tough times for many families facing higher cost-of-living bills, and underlying pressures on claims haven’t gone away.”
Anyone concerned about the cost of their motor insurance should speak to their insurer to explore what support or options might be available, the ABI said.
Options such as increasing the insurance excess, improving vehicle security, or opting for a telematics policy may help to bring costs down, as well as shopping around for a suitable and cost-effective deal.
How to get cheap car insurance
CAR insurance is an essential cost that you hope to never use but will need to cover the costs of theft or damage to your vehicle.
It’s a legal requirement to have car insurance, and going without it could land you with a £300 fine, six penalty points on your licence and even a criminal conviction.
But there are several ways to slash your premiums.
Pay upfront
Insurers give you the choice of paying for insurance monthly or upfront.
Paying monthly spreads the cost of your cover but the insurer adds interest charges which means the average motorist pays around ten per cent more overall.
If you pay for your car insurance annually you don’t pay any interest.
A typical motorist can save up to £225 a year by paying in one go, according to comparison site MoneySuperMarket.
Increase your excess
The excess is what you agree to pay each time you need to make a claim on your policy.
You can usually choose your own excess when setting up a policy and it can be as low as £100 and as high as £500 or more.
The higher your excess, the lower your premium and vice versa.
This means you could bring the cost of your insurance down by agreeing to pay more if you do need to make a claim.
But before you hike your excess, make sure you would be able to pay in the event that you do need to make a claim.
Tweak your job
Certain jobs are seen as more risky than others for insurance purposes.
Making small but accurate changes to your job title can save you money.
For example, swapping your role from “chef” to “caterer” can save you £20, comparison site GoCompare found.
And changing your role from “fast food delivery driver” to “delivery driver” could save you £40.
But lying about your job could invalidate your policy so make sure any changes are legitimate and accurate.
Shop around
Not all comparison sites have the same range of insurers so to get the best price it’s a good idea to check two or three from Go Compare, Comparethemarket, MoneySupermarket and Confused.com.
Insurer Direct Line is also not on comparison sites so check its prices directly.
You can also get a free cash bonus by going via a cashback site such as Topcashback or Quidco.
Save the date
Renewing your car insurance sooner rather than later could save you some cash.
New cover becomes more expensive the closer you get to the renewal date.
But you can buy your car insurance up to 29 days before the policy start date and ‘lock in’ the price you’re quoted on that day.
A typical driver can save up to £265 buying new cover at least 27 days before their current policy ends, according to Go Compare.