A few weeks ago, I received my annual car insurance renewal quote.
As a young and fairly new driver — I’m 25 and passed my test in August 2014 — I expect to pay a little extra to potter about in my ten-year-old Vauxhall Corsa.
Even though I take pride in driving safely, I know insurers worry that inexperienced motorists pose a greater risk on the road.
But at £949, my renewal quote seemed particularly steep this time. It was £58 more than last year — yet there didn’t seem to be any reason for the increase.
I haven’t had any accidents in the past 12 months, nor moved home. The only change is that I have an extra year’s driving experience — and a two-year no-claims bonus. Surely the price should be going down, not up.
Judging by Money Mail’s postbag, many other drivers have been hit by inexplicable price hikes such as this.
Well, I wasn’t standing for it. If I could find a cheaper quote from another firm, it would show Admiral their tricks don’t always work.
So I filled out a form on price comparison website GoCompare, giving my name, address, when I passed my test, where I park and how often I get behind the wheel.
The cheapest on the list of quotes I received back was from Admiral: the same firm that had tried to hike my premium would charge just £792 as a new customer — or £157 less than if I had just signed its renewal form. Feeling insulted, and with several weeks until my old policy was due to expire, I put off the purchase.
This all happened on a Thursday. The following Wednesday, I put the same details into GoCompare. Again, Admiral offered the best price, but this time at £788.70 — another £3.30 cheaper.
‘Aha,’ I thought, ‘prices are going down.’ So I waited another day.
However, in the morning, the cheapest rate was £801.90.
By Monday, it had hit £834.90 — a 6 per cent jump on the rate just days earlier — before settling at £819.50 in the afternoon.
I was baffled. Money Mail has warned about insurance premiums rising this year due to extra taxes and false whiplash claims, but surely not this fast?
Had firms worked out from my repeated requests for quotes that I urgently needed insurance and so would be prepared to pay more for it? I put the question to GoCompare.
A spokesman explained that prices go up and down ‘from hour to hour depending on market fluctuations’.
It turns out that those fluctuations are all linked to supply and demand.
‘If an insurer is inundated with drivers such as you — the same age and from the same area — buying a policy on the same day, the price is likely to rise,’ said the spokesman.
‘But if they want more drivers like you, it could drop.’
GoCompare says at this time of the year, price movements are even more volatile as insurers try to get their business in order by the end of December.
‘The best thing to do is look far in advance and keep an eye on the range of prices you’re offered,’ advised the spokesman. Other industry insiders say a Saturday or Sunday tends to be the most expensive time to buy car cover, ‘as this is when most people have time to shop around’.
It all looked too unpredictable, so I started to explore more surefire ways to reduce my premium.
The price comparison website had asked how far I drove each year, and I’d just given the UK average of 8,000 miles.
But when I dug out my MOT certificate, I discovered I’d actually only clocked up 5,000 miles over the past year. So I adjusted the figure — and the premium dropped by £50.This is because insurers reason that, if you spend less time on the road, you’re less likely to have a crash. But don’t deliberately underestimate your annual mileage, warns GoCompare, or your insurer could later refuse a claim.
Next, I looked into adding my mother as an additional driver on my policy. We often take it in turns to drive to family events around this time of year, so it seemed sensible.
It also meant I would pose a lower risk to the insurer because an older, more experienced driver is sometimes behind my wheel.
By adding my mother’s details to my application, I saved £198. The excess — what I would have to pay before my insurer steps in to cover a claim — also dropped from £310 to £150.
Finally, I considered how to spread the cost of my policy over the year. I didn’t particularly want to fork out nearly £800 in one go.
Yet, if you pay by monthly direct debit, insurers charge interest as if it’s given you a loan, easily adding a couple of hundred pounds to your premium.
So I applied for an interest-free credit card and put the purchase on that.
Sainsbury’s Bank and Tesco Bank both offer interest-free periods on purchases for a period of 28 months.
I kept watch on GoCompare until prices started to dip, put in my annual mileage, added my mother as an additional driver — and paid Admiral £771.10.
It took time to properly shop around, but I now have £178 to spend on petrol, groceries — and maybe even a takeaway or two — knowing the cash would otherwise be boosting Admiral’s bottom line.
A spokesman for Admiral says: ‘We make changes throughout the week, so it’s normal for customers to get different quotes on different days.
‘However, in the majority of cases, these differences are quite small. There is no particular time and date you will get the best rate.’