Car insurance loyalty costing drivers £674 million a year

Loyalty to car insurance companies is costing UK drivers £674 million a year, according to new research.

With 41 per cent of drivers allowing their car insurance policy to renew automatically – more than double the number recorded in 2018 – it means that 16.8 million motorists across the UK are accepting a new policy through auto-renewal.

Of these people, nearly three quarters saw their premiums increase by an average of £40, while one in five saw rises of between £51 and £125.

Nearly one in ten allow their car insurance to auto-renew without shopping around for a better deal, while a fifth choose to stay with their current provider because it’s the easiest option.

A further fifth believe that changing car insurance provider takes too much time and effort.

Dave Merrick, car insurance expert at MoneySuperMarket, who conducted the research, said: “If you let your car insurance auto-renew you’ll more than likely see an increase in your premiums, with our research showing that the average premium can increase by £40. Although some of us are shopping around for a better deal, the number of people allowing their policy to auto-renew has doubled in just a year, meaning that even more people are paying a loyalty tax by staying with their insurer.

“Shopping around for a new deal on your car insurance couldn’t be easier and you save an average of £270.”