New registration plate looms, market responds

CAR INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 28 AUG 2013:

It’s always a hectic time when a new registration plate looms in the not-so-distant future, and with September bringing the new 63 plate the market is prepared.

Not only are car insurance companies girding their loins for the influx of new car owners, but the car manufacturing sector in the UK has been working overtime to provide the vehicles that British consumers want and need. In fact, official figures say that new vehicle demand has been ramping up steadily, with July seeing nearly 129,000 cars made – which was up 7 per cent from July of 2012, indicating that there may be a bit of economic recovery going on finally.

August hasn’t been half bad either, with early estimates finding that production has increased to the point where the just over 893,000 cars manufactured so far in 2013 has eclipsed last year’s figures by 1.9 per cent year on year. It’s a pleasant change to report good news, isn’t it?

Well, it’s not all sunshine and roses I’m afraid. With the September renewal season approaching fast, some 8.5 million motorists in the UK will most likely not bother to shop around for cheap car insurance and will instead just automatically renew their motor car insurance with their existing insurer, despite the fact that switching can save you around £237 annually!

A new research study discovered that as many as 3 out of every 10 Brits can’t be arsed to spend a few minutes on a car insurance comparison site to find a better deal. It’s a shame, because loyalty in the insurance industry is almost unilaterally rewarded with higher premiums, so you’re really not doing yourself any favours if you stick with your existing insurer out of some misplaced sense of solidarity.

See the truth of the matter is that the insurance industry is so competitive it’s positively cutthroat. Insurers will offer ridiculously low car insurance rates on new policies in order to entice consumers to switch over, but these rates are so low that they really don’t generate much revenue for insurers; instead they raise the rates on their existing customers in order to cover the difference.

This means that you’re essentially paying for someone else’s insurance every time you auto-renew. I don’t know about you, but I work hard for my money and would prefer to purchase goods and services directly for myself and not subsidise someone else; if you feel the same way, I strongly suggest you shop around this year unless you like losing money.

 

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