Timing and payment methods of new purchases and renewals can cost or save you more than £500.
Research reveals that late purchases cost more, so buying your car insurance the same day it starts could cost you up to £202 more than arranging it 21–26 days in advance.
Monthly payments also add interest. Unless it’s a specific interest-free monthly policy, paying monthly instead of annually could add another £267 to your bill due to interest fees.
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In total, these two mistakes could leave you paying £534 more for your car insurance each year. That’s money out of your pocket for no additional coverage.
Why does it matter when you buy your car insurance?
Number 1 Plates, experts in all things motoring, say that insurance companies calculate premiums based on perceived risk.
If you leave your purchase to the last minute, they may see you as disorganized and potentially riskier, resulting in higher costs. Buying 21–26 days early signals to insurers that you’re a careful planner, leading to lower rates.
Why are annual insurance policies cheaper?
When you choose monthly payments, insurers typically treat the agreement like a loan, adding interest fees that can exceed 20%. Even drivers with good credit often pay an extra 10% or more. Switching to an annual payment eliminates these charges entirely.
How to get cheaper car insurance
- Plan Your Purchase: Aim to secure your policy at least 21 days before it starts.
- Pay Annually: Avoid the hidden interest fees of monthly payments.
- Compare Quotes: Shop around on multiple comparison websites to ensure you’re getting the best rate.
- Review Policy Details: Double-check that your mileage and usage estimates are accurate to avoid inflated costs.
A spokesperson from Number 1 Plates says: “Too many drivers overpay for car insurance without realizing it. By buying early and paying annually, you can save hundreds of pounds. These small adjustments make a huge difference, and it’s something every motorist should take seriously.”
