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Should I auto-renew my car insurance?

Letting your car insurance renew automatically is the easy option – but it could mean that you miss out on savings on your car insurance premium. Here are our tips on how to break the auto-renewal habit.

Letting your car insurance renew automatically is the easy option – but it could mean that you miss out on savings on your car insurance premium. Here are our tips on how to break the auto-renewal habit.

Written by
Julie Daniels
Motor insurance comparison expert
Reviewed by
Rebecca Goodman
Insurance expert
Last Updated
11 OCTOBER 2023
7 min read
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Does car insurance automatically renew?

When your car insurance policy runs out, chances are your provider will automatically renew it for another year unless you tell them not to. The good thing is that it’s convenient and means you won’t find yourself falling foul of the law by driving without insurance. But the question to ask is whether you’re still getting value for money by auto-renewing every year. 

If your provider does offer an auto-renew quote for your policy, they’ll usually send you a letter around three to four weeks before the renewal date. 

You’re not under any obligation to renew your policy with your existing provider. But many of us do, simply because it’s less hassle. Just be aware that your insurance provider could charge you more for staying with them even if nothing has changed on your policy, so you could be losing out on potential savings. 

What can affect the cost of my car insurance premium?

Insurance providers consider various details when it comes to calculating your premium. If any of these change, the cost of your cover could go up or down when you renew or switch providers. Factors that can affect your premium include: 

  • Your job
  • Your age
  • Your address
  • Your annual mileage
  • The value of your car
  • Any claims you’ve made
  • Any driving convictions you’ve had since your last renewal, such as a speeding fine

Find out what else could affect the cost of your car insurance premium.

How do I know if my insurance provider auto-renews?

Check your policy terms and conditions. If your insurance provider auto-renews, it will say so in there. Otherwise, contact your provider directly and ask them – don’t just assume they auto-renew. If they don’t, and your policy expires, you might find yourself driving without insurance. Driving uninsured is illegal and could lead to a hefty fine and even a criminal conviction.

Your insurance provider should let you know when your policy is due to expire but, ultimately, it’s your responsibility to make sure you’re properly insured.

How do I cancel my car insurance renewal?

Let your insurance provider know that you want to cancel your policy before the renewal date. If you tell them after this point, you may have to pay an administration fee.

You should follow any instructions on cancelling your car insurance, which will be set out in your contract. Only the policyholder is allowed to cancel.

In some cases, you can opt out of renewal online. But it’s more likely that you’ll have to cancel by phone. When you call your provider, make a note of the time, date and name of the person you spoke to just in case there’s any comeback.

Is pay-as-you-go car insurance a good alternative to auto-renewal

It can be, depending on the number of miles you drive a year. Being locked into an annual car insurance policy that renews automatically might not be the most cost-effective option for you if you drive less than 6,000 miles annually. You may be better off with pay-as-you-go car insurance, which charges you for each mile or hour driven, on top of a set basic rate that covers the car against damage or theft while it’s parked. Policies are usually in the form of flexible monthly subscriptions, which you can cancel at any time.

How can I lower the cost of my insurance?

When the time comes to renew, here are some tips on how you might lower the cost of your car insurance:

  • Invest in security: installing an industry-approved alarm or immobiliser could help lower your premium. Talk to your insurance provider about a discount.
  • Add a named driver to your policy: if you’re a new driver, adding someone with more experience and a clean driving record as an occasional named driver could help lower your premium. Just make sure they aren’t named as the main driver if this isn’t the case. This is car insurance fronting and is illegal.
  • Increase your voluntary excess: if you increase the amount you choose to pay towards any claim you make – known as your voluntary excess – your premium will usually come down. Just make sure that you can afford to pay both the voluntary and compulsory excess should you need to make a claim.

Why should I compare car insurance?

Comparing car insurance with us is a quick and easy way of finding the right policy to suit your needs – and it might even save you money.   

Just because your insurance provider has an auto-renewal facility doesn’t mean that you should feel pressured into accepting it. So, when your policy is next up for renewal, compare and see if you could save. It only takes a few minutes. 

And by signing up for automated quotes, we’ll automatically check for better deals before a future renewal.

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Frequently asked questions

Can I transfer my no claims bonus if I switch instead of renewing?

In most cases, yes, you won’t lose your no-claims bonus/discount if you decide to switch instead of renewing. Just make sure you have proof of no-claims. This may be on the renewal letter or cancellation letter you’ll receive when switching.

If you can’t find your proof of no-claims, contact your insurance provider and ask them to send it to you. You might also need to check what type of proof your new provider wants, as this can be different depending on the provider.

What happens if I renew my car insurance, then decide to cancel?

If you renew your car insurance then decide to cancel during the 14-day cooling-off period, you’ll be refunded the cost of your policy minus any days it was active for. You may also be charged an administration fee. If this is the case, the amount should be clearly stated in the policy terms and conditions. 

If you want to cancel your car insurance after the cooling-off period, you’ll usually be charged a cancellation fee. But it might still prove cost-effective if you find a better price for your premium elsewhere.

How do I stop my car insurance from auto-renewing?

You’re free to opt out of auto-renewal if you don’t want your policy to roll over, and you may even be able to do this online. But in most cases you’ll have to call your provider to ask them not to auto-renew your policy. Your cover should then expire on the renewal date.  

Bear in mind that if you do this, you’ll need to remember to get new cover before your policy ends, otherwise it'll lapse and won’t renew – leaving you without cover. The critical thing is that you always have valid car insurance in place.

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Julie Daniels - motor insurance comparison expert

Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.

Learn more about Julie

Rebecca Goodman - Insurance expert

Rebecca Goodman is a freelance financial journalist who specialises in insurance, personal finance and consumer affairs. Rebecca regularly writes for national newspapers including The Independent and The Mail on Sunday on a wide-range of financial topics. She covers everything from money-saving tips and holiday advice to investigations into how energy efficient appliances can cut the cost of household bills and the impact donating money can have on those in need. Along with features in national papers, Rebecca also writes news stories for websites including Yourmoney.com and The Money Edit.

Learn more about Rebecca

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