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Car insurance prices at their lowest in 7 years: time to renew?

Car insurance prices at their lowest in 7 years: time to renew?
Image source: Getty Images


While the coronavirus pandemic and successive lockdowns have made a lot of things in life more challenging, one silver lining is that car insurance prices are the lowest they have been for seven years.

With fewer of us on the roads, there have been fewer accidents and claims. So is now the best time to save on your car insurance? Let’s take a look.

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Lowest car insurance prices in seven years

MoneySuperMarket’s research found that the average cost of an annual comprehensive car insurance policy in the first three months of the year was £417. This is the lowest it has been since 2014. Prices dropped by a significant £73 compared to the end of 2020.

The number of cars on the road has been well below normal levels in the past year. The knock-on effect is fewer accidents, so insurers have had to pay fewer claims.

The bonus for us is that it means they can offer cheaper car insurance prices in order to attract new customers. But is now the time to take advantage of it?

Time to renew

If your car insurance is coming up for renewal, then it is always worth shopping around. And at the time of writing, you may find you can snag yourself a very good deal.

It is well known that the auto-renewal price on your current policy will tend to be more expensive. Therefore, once you get your renewal letter through, spend some time comparing other quotes.

There are lots of good car insurance comparison sites to use. In fact, here at MyWalletHero, we have reviewed our favourites. From household names like Confused.com and GoCompare to lesser-known options such as Quotezone.

When comparing car insurance quotes, it is worth thinking about what you want your policy to cover. Is having a courtesy car important to you? Or do you want to protect your no claims bonus?

Make sure you compare like for like to get an idea of service, and aim to use more than one comparison site. Sometimes, sites have exclusive price discounts that you can’t find elsewhere.

Changing mid-way through the year

It may be that your car insurance isn’t up for renewal yet. But sometimes you can actually save yourself money by switching mid-contract.

While typically there will be some sort of admin charge for changing your insurance provider mid-way through the year, the potential savings of getting a new policy could offset this.

As prices are the lowest they have been for years, why not take a look at what sort of quote you could get right now? If there is a difference of hundreds of pounds, then paying a £50 admin fee may not be too bad in the grand scheme of things.

Obviously, check with your current provider what the cost would be to switch mid-contract. That way you can factor any exit fees into your calculations.

Just remember, if you change provider mid-way through the year, you won’t earn your no claims discount. So if you already have many years of no claims discount under your belt, losing one additional year may not be an issue. But if you are trying to build up your no claims bonus, it may be better to stay put.

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