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Martin Lewis has issued a warning to drivers about a ‘ridiculous’ car insurance rule where consumers could see their payments double.
The Money Saving Expert revealed insurance companies determine their renewal price based on ‘actuarial risk’ – meaning the longer you leave it, the higher the premium could be.
He found some firms were charging customers up to 100% more for leaving it until the last minute to renew.
Martin Lewis told ITV’s Tonight programme: “It seems absolutely ridiculous but insurance pricing is all about actuarial risk.
“And what their risk shows them is the type of people who get car insurance early are a lower risk so they give them a lower price.
“You might pay nearly double if you wait until the last minute to get your car insurance.”
The average quote on the day of renewal was £1,198, according to a Money Saving Expert analysis of 70 million quotes across numerous comparison sites.
The perfect time to renew is exactly 23 days before your policy expires, the Money Saving Expert said.
By renewing just over three weeks before the end of a policy’s end, drivers can save more than £500 and secure a contract for £694.
Martin Lewis explained: “That’s not for your renewal quote, that’s for going onto comparisons to get different quotes.”
Even if the three-week mark has passed it is still possible to save a substantial amount of money, he added.
