Martin Lewis has issued advice to anyone looking for new car insurance deals as research shows premiums have increased by £279 in the last 12 months.
The Money Saving Expert revealed that insurance companies are “legally obliged” to offer existing customers the same rate they would offer new customers.
Martin explained: “If you buy a policy, they are legally obliged to reduce it to the price they were offering to new customers because of the law that says existing customers cannot be charged than new customers.
“The new law against the loyalty penalty that means existing customers pay more than new customers in car and home insurance is in place, but it is extremely specific and most people don’t get this.
“It is channel specific. You cannot have been to that comparison site before. The law says, as an existing customer, you should not be charged more than a new customer who went through the same channel as you.
“If you went direct, then you shouldn’t pay more money than a new customer who went direct. If you went via MoneySuperMarket, then you shouldn’t be charged more than a new MoneySuperMarket customer, but you could be charged more than a confused.com customer.”
Martin Lewis was speaking at the Ideal Home Show at Olympia London, which runs from Friday 22nd March to Sunday 7th April. Find out more at www.idealhomeshow.co.uk.
The comments come as new research from Compare the Market found that typical premiums have increased by £279 over the last year.
The substantial increase in the cost of car insurance may in part be due to a rise in the cost of claims for insurers.
Young drivers, aged under 25, have seen the largest annual increase in the cost of car insurance. The typical premium for motorists in this age group has risen by £648 year-on-year to £2,057 in February 2024.
Julie Daniels, motor insurance expert at Compare the Market, explained: “The rising cost of car insurance is understandably causing concern for many motorists.
“Our research shows motor premiums have jumped by more than £250 year-on-year. For those concerned about the cost of driving, shopping around ahead of renewal is one of the best ways to save money on car insurance.
“We want to encourage motorists who tend more to stick with their existing insurer each year to compare prices to find the right deal for them.”
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