Martin Lewis has advised drivers to mark a crucial date in their calendars as they could secure up to 50% off their car insurance quote. Speaking on his BBC podcast, he discussed an analysis of approximately 18 million insurance quotes, which revealed that the optimal time to search for a new insurance deal is 26 days before when you want your new insurance to start.
He encouraged listeners to note this date in their diary or by other means, to make sure they get their quotes then. The founder of Money Saving Expert urged: “You always want to be getting quotes around 26 days before you want the new policy to start. If it’s anything between about 18 days and 28 days, you’re pretty fine. 26 is the sweet spot.”
For instance, if your policy expires at the end of March and you want a new policy from April 1, you should start looking at quotes on March 6. Mr Lewis highlighted that this differs from the renewal price that your provider may send you.
He clarified: “Your insurance is going to send you a renewal note, it might be two weeks before, it might be a month before. That’s your renewal, that price is irrelevant of when they send it you. It’s about the price when you go and get quotes across the market. When you go on to a comparison site, that’s the 26-day date.”
The reason for insurance companies offering the cheapest deals at this time, is because insurance prices are based on people generally behave and the likelihood that they will make a claim, meaning those groups who are more likely to put in a claim have to pay more.
Mr Lewis told listeners: “What insurance data shows, is that people who renew on the last day are riskier. You’re riskier if you are insuring at the last minute. You can sort of understand how that behavioural trend works. People who insure at the last minute haven’t put that much practice in, and aren’t as prepared, and aren’t as organised as everyone else.”
He added: “That translates into actuarial risk and the amount of claims. What you have to do is shift yourself into the risk category where people are the lowest risk, and the lowest risk is around three to four weeks before renewal.” Big savings are on offer for those who act early, as Mr Lewis said you could see a 50% difference in the amount you pay, compared to if sort it at the last minute.
He said many people have contacted him to say they had secured huge savings thanks to shopping around earlier. One person wrote in to say they had seen a best quote price at 21 days before their expiry date, at £340. Yet for the same quote the day before expiry, it would have cost them £637.
Another driver messaged the show to saying that they only get their quote from their provider 14 days before the expiry date. But Mr Lewis was unimpressed with this, saying “I don’t need your excuses” and that this doesn’t justify their inaction.
He urged the person to be proactive, saying: “Go and check when your car insurance renewal policy ends. Go and put in your diary 26 days before, or maybe four weeks before that so that so you give yourself a couple of days if you’re busy, that it’s time to go and get those quotes.”
Mr Lewis pointed to another way to set a reminder for yourself. He said: “Send yourself a delayed send email. That is my new organisational system, I do it all the time. I send myself emails and reminders.”