Insurance prices fluctuate throughout the year, as well as year on year. Price variations are usually due to scenarios like cost of claims, insurance premium tax changes and how competitive the market is.
Insurance prices have also traditionally followed a cycle, with rising and falling premiums working roughly in 7-year periods.
But did you know that car insurance is usually cheaper to buy during the summer months?
Although the exact month where car insurance is cheapest does change each year, over the last four years, research has shown that it falls either in the spring or summer – with July 2013 being the overall cheapest month in this period.
In contrast, the most expensive month to purchase car insurance falls in the winter.
Between 2013 and 2016, the same research found that December was the most expensive month to buy car insurance, being 13% higher than the monthly average, and 19% higher than the cheapest month to buy.
Market changes can influence premiums
It is thought that higher December prices are due to insurance companies slowing down towards the Christmas period and the end of the year. Often there are less staff around to generate quotes, and technical work and system upgrades are carried out. This means that the market is less competitive and the insurers who are willing to quote can charge more as there is less consumer choice.
The price typically falls again in January when all insurance companies are fully operational and looking for new customers.
In a time when car insurance costs are continually rising, small money saving tips like this can make a big difference.
This is particularly the case for higher risk drivers whose premiums are usually significantly more than the average price.
Tips to save you money on your insurance
Although it might seem like you are stuck in a loop if your renewal falls in December, you can change your insurance mid-term, sometimes without a penalty, in order to move your insurance date to a more suitable one. Then you can take advantage of more competitive pricing.
However, bear in mind that if you do consider switching insurance provider or policy, you should always make sure you are still getting the right level of cover for your circumstances.
It’s not only the time of the year that can affect your renewal quote. Making sure you compare policies rather than just accepting your renewal price can also save you money.
In addition, making sure you don’t leave getting a quote until the last minute can mean your cost for cover is less.
Working with a broker when you get your renewal reminder can be the most effective way of getting a good deal.
A broker knows the right questions to ask a policyholder and can search a number of insurance companies to get the best price and more importantly, the right level of cover.
Read our article on changing insurers for more ways to save money on your insurance.
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