Archive: MoneySavingExpert's Money Tips Email

Warning. Don't wait till the last min to buy car insurance. The PERFECT time is 20 to 26 days ahead, cutting typical costs by 40% 

For years we've been refining our system on how to get the cheapest car insurance. In summer 2018, after analysing more than 18m car insurance quotes, we told you the perfect time to get it was 21 days before renewal.

Now we've redone the analysis, with over 50m quotes (courtesy of Compare The Market, Confused.com and MoneySupermarket) and we now think you've a six-day sweet spot, from 26 to 20 days before renewal, where you'll find the cheapest price - after that, prices rise steadily.

This isn't about the price from your existing insurer - that's your renewal quote (and is generally expensive and should be avoided). This is about getting quotes as a new customer. A policy that costs an avg £1,218/yr on renewal day would be just £672/yr 24 days ahead - statistically the cheapest day. That's £546 less.

And following this works in practice. We've had many people reporting successes to us, such as Hayley: "Renewed 3wks early after your tip. It's gone from a renewal price of £108/mth to £51/mth [saving £684/yr]. Checked the comparisons later and it went back to £100. Happy."

Wondering why this happens? It's all about risk...

One big factor in car insurance pricing is 'actuarial risk' - where insurers set prices based on the likelihood of claims, using data from millions of drivers' claims history.

Some of these - car type, address, occupation - are well known. Yet the Financial Conduct Authority's recent insurance report said some firms employ more than 400 rating factors - many of which are hidden (we're working on finding them out). That's why we examined lots of data to find the pattern.

When we first revealed this 'days before renewal' effect, thankfully some insurers were open about it. LV told us: "Our historic claims data shows riskier drivers get their policies nearer to renewal."

And it really is as simple as that. Drivers who leave it until the last minute are statistically riskier, therefore they pay more. Of course by telling you, there's a chance we'll subvert future risk charts, as some riskier drivers may now do it earlier.

But even if we did move the market so much, it'd likely take years to filter through. We'll keep redoing the analysis to be on top of it.

• Renewal fewer than 30 days away? Aim to get a quote 3-4 weeks before, but if you've missed the sweet week, then just do it ASAP. Here's what to do...
  
  - Combine comparison sites to speedily find your cheapest. There's no single cheapest insurer, as prices differ for all. So plonk your details into comparison sites and in seconds they check dozens of quotes each. But they don't all cover the same insurers or even give the same price per insurer, so use as many as you've time for.
   
  Our current order's MoneySupermarket*, Confused.com*, Compare The Market* & Gocompare* (see how we rank them).
  
  - Check hot deals comparisons miss, incl free £60 M&S voucher. Some deals aren't on them, eg, £60 M&S vch from Age Co* (vouchers come within 120 days of buying a policy).
  
  Plus you won't find big insurers Direct Line* or Aviva* on comparison sites - they're worth a check. For full details, see hot deals comparisons miss.
  
  - Check multicar policies if you've more than one car in your home. Some insurers offer discounts if you insure more than one motor in your household with them, but there's no hard and fast rule as to whether individual or multicar policies are cheapest. The only way is to check, see multicar discounts.
  
  Michael emailed us: "I saved £416 breaking up with my daughter. Our 'multicar' policy wanted £1,255 to renew. Going separate ways, I got mine for £249, my daughter's for £490."
  
  - Do the counter-logical car insurance checks. Comprehensive may be cheaper than third party, as some insurers see you as a lower risk. Plus adding a responsible second driver can cut costs - especially if you're a young driver (but never lie and say they're the main driver if they're not - that's fraud). See more cost-cutters.
  
  Tom tweeted: "Thank you #martinlewis. Insured my elderly father on my young driver's insurance. Just instantly saved £200."
  
  - Check for extra cashback. Once you've found your cheapest insurance, you may be able to get extra money back from cashback sites (do this at the end of the process though - and check prices, as you may get more expensive quotes). See car insurance cashback.
  
  - Don't want to switch insurer? Haggle. This works best at renewal. Simply find the best deal using the tips above and ask your provider to beat it. See our haggling tips.
  
  
• Nowhere near renewal but unhappy with your price? You don't have to be at renewal to switch. If you haven't claimed, you can usually cancel your policy for a £50ish admin fee (factor that in) and get the rest of the year refunded. Just follow the steps above to check.
   
  You will miss out on a year's no-claims bonus, but if it means big savings it can be a winner, as Iain tweeted: "I just saved £375 by changing car insurance MID-POLICY - thanks @MartinSLewis."
  
  The key is to set your new policy to start 24 days after you get the quote to get the best price. Full help in switching mid-policy.
  
  
• Nowhere near renewal and can't be ars.. bothered to check now? DON'T WAIT for them to get in touch, put 26 days before your next renewal in your diary now. 

Over to Martin: "This week, the lead story is all about slashing broadband costs. Over 8m homes are out of contract and overpaying. So I'll take you through how to save, and in some cases this can be £500+/yr. Plus more on saving for your kids to go to uni. You can't afford to miss it."