UK motorists are being overcharged by £2.4 billion for their car insurance by failing to shop around and accepting higher premiums.
Motorists paid an average of £109 per vehicle more than they would have done had they looked around for other quotes, new research suggests.
In fact, data compiled by Compare the Market shows that up to 58 per cent of drivers fail to shop around even if cheaper quotes were available.
However, figures also show that the average premium in the three months leading to the end of September was £707 – a decline of 3.3 per cent compared to the previous year. This drop could reflect a fall in the number of new cars being registered, with sales down by 3.4 per cent since the start of 2019.
Loyal customers are being hit the hardest, with these customers allowing their insurance policies to renew automatically – and therefore getting far higher prices than those drivers who switch providers.
Dan Hutson, head of motor insurance at Compare the Market, said: “Premiums are falling which, after years of rising prices, is extremely welcome news. However, there is the chance that this apparent positive could be a wolf in sheep’s clothing if it begins to discourage consumers from shopping around.”
Though new rules introduced by the Financial Conduct Authority in 2017 which require all motoring insurance providers to show the price of the previous year’s premium on a renewal notice, the study still suggests that most motorists opt for more expensive policies than they need to.