Drivers have recently been hit by extortionate car insurance price hikes, with drivers paying 23% more on average than a year ago.
Data from comparison website Go.Compare suggests average car insurance quotes hit £456 during the second quarter of 2024, up from £371 a year earlier.
The Association of British Insurers suggests the average price paid by motorists for car insurance across the industry is now £622.
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Inflation and increased claims have contributed to the steep rises.
Older drivers aged over 80 have felt the brunt of higher premiums in the past year, with costs rising by 27% according to Compare the Market. This is owed to a combination of high inflation and a rise in the cost of claims made by drivers to insurers.
Why has car insurance gone up?
Car insurance premiums are determined by a range of factors such as the car you drive, your track record and where you work and live.
Insurers blame the rising costs of claims from policyholders, due to spare parts and repairs costing more.
But while there are ways to cut the cost of car insurance premiums, by picking the right cover, protecting your no-claims bonus or tweaking your job title – you could save hundreds more by picking the right day to buy your cover.
Tom Banks, car insurance expert at Go.Compare said: "While many of us know the importance of shopping around for our car insurance, it’s less likely we’re aware of how the price might change depending on when we buy. So, to get the most for your money, we recommend keeping a note of your renewal date and starting your car insurance search well in advance."
Here’s how to pick the best day to buy your car insurance premium.
When is the cheapest day to buy car insurance?
The cheapest day to buy your car insurance is 26 days before your renewal date, according to Go.Compare research. This could slash your costs by around £200.
Here’s how much the cost of your car insurance premium could differ based on the day you book, according to the comparison site.
| Days until car insurance renews | Average (median) price paid |
|---|---|
| 26 | £367 |
| 24 | £377 |
| 22 | £381 |
| 20 | £381 |
| 18 | £384 |
| 16 | £384 |
| 14 | £395 |
| 12 | £393 |
| 10 | £404 |
| 8 | £412 |
| 6 | £423 |
| 4 | £448 |
| 2 | £484 |
| 0 | £569 |
You can expect to pay a higher price the later you buy your car insurance premium. But, buying a couple of days later also makes all the difference.
Purchasing your car insurance 24 days before your renewal date means you could pay £10 more than if you bought it 26 days earlier. If you book 20 days before renewal, it will cost you £14 more compared to buying with 26 days left, and if you leave it with 10 days to go, you’ll end up paying nearly £40 more.
Leave your car insurance premium to the day of renewal, and you could end up forking out more than £500 (55% more) and miss savings of around £200.
While sitting on your renewal is risky, it’s just as bad buying it too early. Go.Compare says you can buy car insurance premiums up to 29 days before your renewal, but on day 29 you could end up paying £383 – £16 more than what you’d pay 26 days prior to your renewal date.
So, 26 days is really the sweet spot – and perhaps a note for your diary. But, it’s important to know there are other factors that come into play when buying your car insurance premium, and there are other ways to cut costs too.
How to cut car insurance costs
There are several ways to cut the cost of your car insurance premium.
Buy an annual policy. If you can afford to pay your policy off in one go, you should. The other option is paying for your premium monthly, but it means interest will be added to your monthly payments, which means you’ll end up paying more. According to MoneySupermarket, you could save up to £225 on average by paying annually rather than monthly.
Build no claims bonus
If you’re wondering how valuable your no claims bonus is, it is quite significant. The more years you go without making a claim on your policy, your no claims will build up and knock some money off your premium – otherwise known as your no claims discount. The trade body for the car insurance indsutry, Association of British Insurers (ABI) says one year of no claims could save you up to 30%. The discount could double to up to 60% with five years of no claims.
Be cautious of being a named driver
Being a named driver means adding yourself on someone else’s insurance policy. It means you can also drive the vehicle and you are protected if there’s an accident or damage to the vehicle. Though any claim on the policy would be in the name of the main driver.
Young drivers or anyone starting off can expect high car insurance premiums, as you’re new on the road and you won’t have any no claims. In this case, it’s a good idea to add an experienced driver as a ‘named driver’. Connor Campbell, expert at Independent Advisor Car Insurance said: “adding a parent with more driving experience to their policy as a named driver will normally see them benefit from cheaper premiums.” But if it is your policy and your car, it’s important to keep yourself as the main driver, as it’s the only way to build your no-claims bonus. As a named driver, you don’t get any no claims.
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