{"id":1966,"date":"2019-03-11T17:36:43","date_gmt":"2019-03-11T17:36:43","guid":{"rendered":"https:\/\/www.scrapcarnetwork.org\/news\/?p=1966"},"modified":"2025-02-26T07:06:38","modified_gmt":"2025-02-26T07:06:38","slug":"are-you-being-hit-with-car-insurance-loyalty-tax","status":"publish","type":"post","link":"https:\/\/www.scrapcarnetwork.org\/news\/are-you-being-hit-with-car-insurance-loyalty-tax\/","title":{"rendered":"Are you being hit with car insurance loyalty tax?"},"content":{"rendered":"

Are you paying too much for your car insurance? It\u2019s such a well known saying that it\u2019s often used as a punchline these days. There\u2019s a reason it\u2019s so common, though – it turns out that it\u2019s surprisingly easy to do. Unlike scrapping your car<\/a>, which you\u2019ll only have to do once every few years at most, renewing your insurance crops up on your to-do list every year, and recent research by MoneySuperMarket showed that over a third of their respondents were being hit with a loyalty tax. Now, it\u2019s not an actual tax, as such. So what exactly is it, and how can you avoid being charged it? <\/span><\/p>\n

Who is paying loyalty tax?<\/span><\/h2>\n

When was the last time you shopped around for your car insurance? If the answer is \u2018well over a year ago\u2019, then you could be one of the millions of drivers who may be overpaying. The survey by MoneySuperMarket found that over two thirds of respondents had seen a rise of \u00a340 in the cost of a fully comprehensive policy over the past 12 months. More than a third (35%) said that they had let their policy auto-renew – a service that the vast majority of insurers provide.<\/span><\/p>\n

In a nutshell, there\u2019s no guarantee your cheapest policy for one year is going to be your cheapest policy for the next, so it literally pays to shop around. The money you could be losing for not doing so is what we\u2019re talking about when we refer to a \u2018loyalty tax\u2019. Those who pay for their car insurance in monthly instalments are at higher risk of this, as they\u2019re 54% more likely to let their cover auto-renew then people who pay theirs annually.<\/span><\/p>\n

\"calculating<\/p>\n

What\u2019s more, 27% of drivers have been with the same insurer for three years or more. While there are often good reasons for this, if you\u2019re one of those people, we\u2019d still recommend checking out the competition every now and again. Especially since Consumer Intelligence recently concluded that 51% of drivers could save up to \u00a3262 by shopping around online. Those are very good odds for you! The Financial Conduct Authority launched an auto renewal bill back in 2017, too, forcing insurers to clearly show the previous year\u2019s premium at each renewal, so that motorists can easily compare it to the latest prices. <\/span><\/p>\n

So why aren\u2019t drivers doing more to avoid it?<\/span><\/h2>\n

Well, we\u2019ve not done any surveys ourselves here at Scrap Car Network, so we can\u2019t give you any scientific answers, but we\u2019ve certainly got some ideas! The first of which is that many drivers (especially newer or less experienced ones) aren\u2019t aware of the FCA legislation and how it helps them, or they don\u2019t fully grasp how much they could save. It likely boils down to one of those universal truths; most people just don\u2019t like dealing with the paperwork and hassle.<\/span><\/p>\n

We can understand that sentiment here at Scrap Car Network. Owning and running a car generally involves a lot of form-filling anyway, so it makes sense that people would want to avoid it. This can be particularly true when the time comes to scrap your car, which is why we\u2019ve made a conscious effort to save you as much time, paperwork and effort as we can when you scrap your car with us. All you have to do is enter your car reg and postcode into the fields above, and you can get an online valuation of your car in as little as ten seconds. How about that, eh?<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Are you paying too much for your car insurance? It\u2019s such a well known saying that it\u2019s often used as a punchline these days. There\u2019s a reason it\u2019s so common, though – it turns out that it\u2019s surprisingly easy to do. Unlike scrapping your car, which you\u2019ll only have to do once every few years […]<\/p>\n","protected":false},"author":113,"featured_media":19,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n\n\t\n\t\n\t\n