Loyalty to car insurance companies costs drivers £1.7b yearly

Staying loyal to their car insurance companies costs drivers an extra £1.7 billion annually on their motor car insurance policies, new research has found.

A new investigation has found that there are massive differences between what an existing customer is offered for a policy renewal and the discount car insurance quotes offered to new customers in order to entice them to enrol.  Those who remain loyal to their insurers have ended up paying an average of 10 per cent more than if they had decided to switch to a new insurance provider, the investigation found.

In an example of such, the investigation found that a 29 year old male with a VW Polo would be charged £732 as a new customer.  However if the same customer was instead renewing their insurance, their new premium would be £803, which is nearly 10 per cent more.

Despite this difference, an incredible 85 per cent of motorists remain with the same insurer every year like clockwork.  Moreover, new customers are also lured in with two months’ worth of free premiums, substantial premium discounts, and other perks – yet none of these enticements are ever offered to customers who choose to renew their insurance cover with the companies.

Insurance providers may lure motorists in with competitive deals or special discounts in the initial year when newly insuring a vehicle, insurance experts say.  However these incentives are almost never available to existing policyholders.

Certain insurers will readily raise your renewal prices unless you shop around for a new provider in the second year, these experts also say.  Consumer apathy is the one thing insurers are counting on to keep their profit margins high.

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