More than four million drivers caught in £982m insurance loyalty trap

UK drivers are overpaying on their car insurance by £982m each year by allowing insurers to automatically renew their policies, according to new research.

At the time of their last renewal, 4.1 million drivers allowed their insurance to roll over without checking beforehand if there was cheaper cover available first – missing out on a potential saving of up to £239.69.

Lee Griffin, CEO and founder of GoCompare said, “Insurers typically use their most competitive offers to attract new customers and rely on existing customers’ apathy to charge higher renewal prices.

The research found that at their last renewal, 44 per cent of drivers allowed their insurance to do so automatically – 13 per cent without checking to see if they could get a better deal first.

A survey of 2,000 drivers by GoCompare found that 22 per cent allowed their insurance policies to auto-renew because they thought that insurers offers the cheapest premiums the previous year so would continue to offer good value in the second year. Some 21 per cent also didn’t shop around simply because switching was too much hassle.

The research also found that drivers who pay for their insurance via monthly direct debit are 55 per cent more likely to allow their insurance to roll on without checking for better deals compared to those who pay annually.

Lee Griffin, CEO and founder of GoCompare said, “Insurers typically use their most competitive offers to attract new customers and rely on existing customers’ apathy to charge higher renewal prices.

“With 55% of drivers more likely to allow their policy to automatically renew if they pay monthly, it’s time for people to take control of their finances and consider how much they could be saving by switching.”