Important Disclosure: The content provided does not consider your particular circumstances and does not constitute personal advice. Some of the products promoted are from our affiliate partners from whom we receive compensation.
If you require any personal advice, please seek such advice from an independently qualified financial advisor. While we aim to feature some of the best products available, this does not include all available products from across the market. Although the information provided is believed to be accurate at the date of publication, you should always check with the product provider to ensure that information provided is the most up to date.
Table of Contents
Getting the best price on your car insurance is particularly important at a time when premiums are rising, even if you’ve not made a claim.
Car insurance is a necessary expense and a legal requirement. Fortunately, there are ways to keep your car insurance costs to a minimum, including knowing the best time to renew your cover.
When is the right time to renew car insurance?
Generally, the closer you get to your renewal date, the more you’re likely to pay for your car insurance. The cheapest time to renew your car insurance policy is generally about two to four weeks before your renewal date.
According to data from Quotezone.co.uk, drivers could save an average of 33%-45% on their car insurance premiums if they renew their policy 15 to 24 days before it expires.
Why? Because insurers know that you’ll be increasingly keen to get your cover in place the closer you are to your existing policy expiring. Their logic is that this will make you more willing to swallow a higher price.
It’s also the case that some insurers take the view that anyone who leaves renewing their cover to the last minute might be disorganised when it comes to general car maintenance, potentially increasing the likelihood of a claim.
They might even conclude that a disorganised person might be more at risk of having an accident.
Why does the cost of car insurance often increase at renewal?
Many people renew their car insurance policy with the same provider each year. But, of course, the cost can go up, even if your circumstances haven’t changed from the year before.
There are two main reasons why car insurance costs can go up at renewal. The first is economic factors such as insurance premium tax, vehicle repair costs and the number of uninsured drivers on the road. The second is risk.
If you’ve made a claim on your car insurance in the past year or you’ve had a driving conviction, insurers will regard you as higher risk and will push up your premiums accordingly.
Similarly, if your estimated annual mileage has gone up from a year ago, there’s a greater risk of you being involved in an accident and your premiums will rise as a result. You might also pay more if you’ve moved to an area with a higher level of car crime, or if you’ve changed jobs and are now in what insurers deem to be a risky occupation.
But one factor that can no longer affect your car insurance premium is whether you’re a new or existing customer.
Previously, insurers frequently offered their best prices to new customers in a bid to get more people on their books and grow their market share, while existing customers paid more. But thanks to a rule change in January 2022, car (and home) insurance providers can no longer charge existing customers more for their renewal than they would charge a new customer for the equivalent policy.
However, this ruling doesn’t mean that your existing car insurance provider will necessarily offer the cheapest price when your car insurance policy is up for renewal. The only way to be sure you’re getting the best deal is to continue to shop around for your car insurance on an annual basis.
How else can I cut the cost of car insurance?
Fortunately, there are a number of steps you can take to cut your car insurance, alongside shopping around to find the best deal.
For a start, it’s cheaper to pay for your car insurance upfront on an annual basis rather than in monthly instalments as you’ll be charged ‘interest’ to pay monthly.
If you can’t afford to pay for your insurance in one go, a 0% purchase credit card will enable you to spread the cost interest-free. It’s best to spread your payments over a maximum of 12 months so that your payments for this year’s insurance don’t overlap with next year’s.
It’s also important to think carefully about whether you need any add-ons. Car insurance providers will often require you to pay more for extras such as courtesy car cover, windscreen cover and legal cover. But you might not need them all, so choose wisely.
Increasing the amount you’re willing to pay in voluntary excess towards the cost of any claim you make is another way to bring down your insurance costs. Just remember that you will also need to pay your policy’s compulsory excess so it’s vital that you check the total excess will still be affordable.
Reducing your mileage will also help to cut premiums, as will increasing your car’s security. You can do this by parking your car on your driveway or in a garage, rather than on the street, or by fitting extra security measures such as a tracker or immobiliser.
Remember that, if anything changes before your policy is due to renew – if you’ve changed address, for instance – you must inform your insurer as soon as possible. If you don’t, you risk invalidating your policy.
You might have to pay an admin fee in the region of £25 – £50, and the premium might be adjusted according to any changes in your risk profile.
Frequently Asked Questions
What time of year is car insurance the cheapest?
While there’s some evidence to suggest that quotes are lower at certain times of the year, you won’t have a choice if you’re renewing your cover because the policy will end 12 months after you bought it.
Similarly, you must have a valid insurance policy to drive legally – and this means you’ll have to buy a policy when you need to drive, unless you’re prepared to potentially wait months for a potentially cheaper time of year.
What day of the week is best to buy car insurance?
Again, there is data suggesting car insurance quotes are higher at weekends – providers assume you need to get your cover sorted in your ‘free time’ and will therefore be more likely to accept whatever price you are quoted.
But, irrespective of this, it’s generally better not to wait until your policy has almost expired to look for a new one since it weakens any potential bargaining position.
Why is car insurance cheaper if you buy it in advance?
The more time there is before your policy expires, the more time you have to compare quotes and consider your options.
If you leave it until the last minute to buy a policy and insurers see that you need the new policy to start tomorrow, they know that you don’t have as much time to spend looking for cheaper prices, and so they may quote higher prices.
How much can you save buying car insurance at the ‘right’ time?
Consumer website MoneySavingExpert has claimed that in some circumstances it was possible to save more than £500 by buying a policy between two and four weeks before your renewal date.
However, any actual savings will of course depend on your personal circumstances, your driving history and your vehicle.
What is the ‘21 day’ rule for car insurance?
There’s some evidence to suggest that the best time to renew your car insurance and get the best price is 21 days before you want the policy to start.
For example, buying a policy on the first of the month if you’d like it to start on the 22nd of the month.
