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Martin Lewis has shared the best time to check for car insurance quotes as a fan saved almost £900 using his suggestion.
On BBC 5 Live today, Mr Lewis explained to co-host Nihal Arthanayake how Britons can make savings, especially as insurance continues to increase.
The money saving expert stated that the exact day that someone gets their car insurance renewed has a “direct impact” on average on the price they will be quoted.
He said: “If you start looking around 30 days before renewal, we’re starting at about £900 for a quote on average, based on research of 70 million quotes.
“This price then drops very very rapidly until about 27 days before renewal, you’re now on around £675. It then drops to a little further and bottoms out at 21 days before renewal where it’s £590.”
Following his 21 day suggestion, a fan emailed the money saving expert to explain how he knocked his insurance down from £1,500 to just £650 by using comparison sites three weeks before renewal.
Krishna explained: “I was a non-believer until my quote went down from £1,500 one month before insurance expiry to an unbelievable £650 21 days before expiry.”
Mr Lewis’s data found that Britons could get a quote for almost half price if they get check 21 days before their renewal date.
As the date gets closer to renewal, the price of insurance slowly rises and is back to the original price of £900 12 days before renewal.
If someone tries to renew on the day before their car insurance policy expires, the data shows it would cost £1,200.
It should be noted that this doesn’t mean everyone will get a £590 policy 21 days before their policy, it is just an illustration of the price patterns based on a beginning quote of £900 from the data he collected.
“Timing is everything,” he stated, continuing: “The sweet spot is between 25 days and 18 days”.
One caveat to consider is that industry analysts have stated there will be continued rises between 10 and 15 percent over the next year on car insurance so prices will still go up.
Mr Lewis explained why the date makes a difference, saying: “The question of course is, why on earth does it make a difference? And the answer is very simple, it goes all the way back to that ‘it’s all about actuarial risk’. And what the insurers’ risk tables show is that the type of people who leave it to the last minute are a higher risk than people who don’t.”
The money-saving expert said that being an early bird could also be beneficial in the arena of home insurance.
He told listeners that both car and home insurance are set to rise up to 15 percent over the next year, urging his audience to think about next year’s policy as soon as possible.
Mr Lewis said it’s worth shopping around even if you still have a lengthy six months on your current insurance, as early exit fees are usually around just £30.
But he stressed that if you do leave early to switch to a cheaper policy, you will not earn any no-claims bonus for the current year.
Episodes of The Martin Lewis Podcast are available on BBC Sounds.
