Deferring car insurance cover can halve premiums

Amending the date on which you want your car insurance policy to become ‘active’ could reduce your premium by hundreds of pounds, according to Which? research.

Which? Money collected quotations from 15 major providers for a Ford Focus driver living in South London – and found that changing your start date by just one day can make a significant difference.  In one case, a one-day deferral of cover cut the cost by 49%.

You’re given this option online or on the phone when you’re searching for a quote.

For all the collected quotations, the initial quote provided was for insurance cover active from the 30 January – the day the quote was taken. But Which? then went back and changed the ‘start date’ to see what effect this had on the annual price.

With most insurers, this didn’t impact cost – but with several, it made a huge difference. Moving the date forward a day to 31 January knocked £121 off Nationwide’s premium, £115 off LV’s and £95 off Direct Line’s.

With Tesco Bank, a one-day deferral of cover cut a blistering £780 – or 49% – off the initial price of £1,577. Postponing to 1 February took the quote down another £99 – a reduction of £879 over the two days.

Insurers told Which? that those who buy cover in advance statistically pose less risk, resulting in cheaper premiums.

A Tesco Bank spokesperson said, ‘Some of our underwriters have identified that the period of time between the quote date and start date of the policy can be a risk factor, and so this can affect the premium that is offered.’

Tesco Bank contacts customers 28 days before their policy expires to advise them of their premium, advising anyone shopping around to do so well in advance.

LV said that it sometimes offers discounts to customers who insure in advance, but that it regularly changes rates in response to market conditions and ‘policies that start on different dates may have different prices, according to when a rate change takes effect.’