Motorists looking to save on their car insurance should renew their policy around three to four weeks before it is due to expire in order to get the best deal, analysis of comparison website data shows.
This sweet spot can save hundreds on your renewal costs, instead of paying the potential penalty for auto-renewing or leaving it last minute.
There are also changes afoot in the insurance industry and motorists should also have access to fairer prices as of January.
This is because the Financial Conduct Authority had ruled that car and home insurers will not be able to charge existing customers more than new consumers, in a bid to crack down on the loyalty penalty.
Drivers could save on their car insurance by choosing to buy or renew policies at a certain time
It is hoped the changes will stop existing customers that do not want to switch insurance providers from being ripped off.
In order to find out how much you could save, This is Money has combined data from several comparison websites to see exactly when is the best time to renew car insurance policies.
Uswitch revealed customers should renew their plans 30 days before their existing policy expires to get the best deals.
A spokesperson said: ‘Around 30 days before your existing car insurance policy expires, your insurer should ask if you wish to renew your cover – that’s a signal to compare deals to see if you can save.’
The comparison site added the cheapest renewal quotes are found roughly three weeks before a drivers policy is due to end.
It also warned drivers not to leave renewal until the last minute as that could mean more expensive policies as drivers are seen as a bigger risk for leaving it late and know that motorists will be more desperate to get cover sorted.
Meanwhile, for those specifically looking to renew their policy, purchasing car insurance within 15 to 28 days of a renewal date gets customers the best price, according to MoneySuperMarket.
It is also found that renewing the day before it is due costs on average 17 per cent more than renewing in that thirteen-day window.
The site said premium holders that update their policy the day before their renewal date could be spending £83 more than those renewing in the 15 to 28 window.
Kate Devine, car insurance spokesperson at MoneySuperMarket, said: ‘Many of us leave renewing our car insurance until the last minute. Insurers know this which is why we see renewal prices increasing the closer to your policy’s end date.
‘What our research shows is that it pays to be organised. If you haven’t renewed your car insurance for a while, it’s likely you could make even greater savings, so make sure you shop around for a new deal – doing so is quick and could save you up to £218.’
Data from Go Compare also reveals customers could save £350 by renewing their policy 26 days before it is due to expire.
Even leaving it will 15 days is a good idea, when you look at the graph below indicating the ‘on the day’ quote.
Go Compare data shows its better to buy insurance 26 days before renewal as it’s cheapest
Insurers say winter months are cheapest to buy insurance
The winter months are also the best time to buy car insurance, according to data from several websites.
Uswitch revealed its customers are best buying car insurance between August and February as that is when providers are competing the most for drivers custom.
A car insurance expert at Uswitch said: ‘Car insurance purchases peak during March and September as many new cars are bought when the number plates change.
‘But we see the most switches for car insurance in August and February, as motorists prepare for new purchases or begin renewing their existing policies.
‘As a result, competition between insurers is rife which means drivers have access to better deals around these times.’
Meanwhile, Compare the Market revealed motorists could save the most in February and March with prices averaging £638 and £637, respectively.
Compare the Market said insurance was at its most expensive in December at £712
It also revealed that whilst the winter months are the cheapest time to buy or renew, costs are at their highest in December at an average of £712.
A spokesperson said: ‘Our figures show the cost of car insurance can vary significantly at different points of the year, and this is something that consumers should bear in mind when looking to renew their policy.
‘Drivers could save around £75 by purchasing car insurance in February or March rather than December.
‘One potential reason for this is that the cost of a policy reflects the level of demand in the market at any given moment, along with a range of factors based on a person’s risk profile.
‘In December, some people are thinking about car insurance less, and so insurers can charge higher prices based on this reduced demand.
‘The cost of car insurance then tends to drop significantly in January as insurers compete to attract customers as they start to look more at their bills after the Christmas break.’
Can you save on car insurance?
Drivers can save hundreds on their car insurance every year just by comparing prices online.
Using comparison sites like This is Money’s partner, Compare the Market, will allow you to see whether you could cut costs by switching provider.
Motorists could also use quotes to negotiate with their current insurer.
To see if you could save today, visit This is Money’s partner, Compare the Market.
GoCompare confirmed that winter months are the time to buy as its data showed premiums seemed to be consistently lower between November and February.
It also stressed that anyone considering changing their policy mid-term to find a cheaper premium should take into account several things.
Firstly, those who decide to change insurers mid-term, will likely have to pay cancellations fees with costs varying by insurer.
Secondly, if a driver is paying in instalments, they will also have to pay any interest charges due on the overall policy.
Finally, any mid-term cancellation could mean losing your no claims discount, which is usually based on the full year that a policy is held, therefore, you could lose out on your current year no claims discount.