Martin Lewis has revealed how we could potentially have an unnecessary £500 added to your car insurance bill
And, the hefty amount could easily be avoided with this simple solution, reports CambridgeshireLive.
According to Martin Lewis, renewing your car insurance at the last minute could cause premium prices to rapidly increase
By renewing it on the day itself, it could cost you an extra £546 – raising the average price of premium from £672 to £1,218.
After looking through more than 50 million quotes from various comparison sites, MoneySavingExpert settled on the cheapest and most expensive times to buy car insurance.
According to the results, the best time to buy car insurance is 24 days before your policy is up when the average insurance policy costs just £672.
Buying anytime between 20 and 26 days can save you 40 per cent on your car insurance premium but after, be warned – prices can rise drastically.
On average, it’ll cost you an extra £390 to renew the insurance the day before it expires.
But on the day itself is the worst time to renew insurance.
Martin Lewis previously said: “It works like this because the biggest factor in insurance pricing is ‘actuarial risk’, which means the price is dictated by the likelihood of claims, based on data of millions of drivers’ claims history.
“Some of these, including car type, address and occupation, are well known.
“Yet the regulator, the FCA, recently reported there are 50 to 400 different factors, many of which are hidden.
“This ‘days before renewal’ kink is one of those factors. Insurers have admitted to us that quite simply drivers who leave it until the last minute are statistically riskier, therefore they pay more.
“Of course, by revealing this, there’s a chance we’re subverting 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 factor through, and we’ll keep redoing the analysis to be on top of it.”