Avoid the inertia trap! 4 steps to cheaper car insurance

Avoid the inertia trap! 4 steps to cheaper car insurance

The first few months of the year are a high cost time for everyone. It’s not just winter heating bills and the Christmas splurge that need to be paid for, we are now well into car insurance and motor tax renewal season. There’s not much we can do to bring down the cost of motor tax, but with a little effort, we should be able to shave a few euro off our insurance.

Unlike the UK, there are no comprehensive car insurance comparison services operating in Ireland. There are some sites that look like comparison services, but they generally provide quotes and insurance through just one company. Without the kind of tools and transparency our neighbours in the UK have, we need to do the spadework ourselves if we want to bring down the cost of our insurance.

When renewing your motor insurance, it is important that you shop around. Don't fall into the inertia trap! This is what your insurer wants to happen. They send you a renewal letter - often with at an increased rate - and hope you will simply pay up. Even if you use a broker and you expect them to do the legwork for you (after all that's what they're paid for, right?) you might find that by following a few simple steps, you can save even more off your renewal premium by yourself.

Step 1: When you receive your renewal letter - 3 weeks to renewal

If you're like most people, the renewal letter comes in the post, is opened and glanced at. You probably tut-tut at the price and promise that you'll try and find a better insurance rate. Rather than doing what most people do (ignore it until the day before renewal) why not immediately win the upper hand by getting 3 other quotes? There are brokers with websites that you can start from if you don't want to talk to actual humans at insurance companies first... It shouldn’t take more than 30 minutes to get 3 quotes.

Step 2: 7 days before renewal

Contact your existing insurer. Tell them you're surprised that the premium is as high as it is (even if you're not). Ask how much it was last year, and if it’s gone up, ask why. This will tell them that you are serious about paying them as little as possible, and that you haven't fallen into the inertia trap. Tell them you have 3 other quotes and theirs will need to improve. Your premium is much more flexible than you may think and to keep you as a customer, they will probably reduce it on the spot. Ask them if this is their best and final rate - you might squeeze another few euro out of them. You should now have your best renewal rate.

Step 3: 5 days before renewal

Revisit the 3 quotes you have, call the three insurance companies and tell them your best renewal rate. Some companies - like the AA - have a "match best renewal" offer where they will beat the premium by €20 on like-for-like policies. If your best renewal policy has the same benefits as theirs, they'll beat it by €20 to win your business. See if the other companies will do the same, and remember you're in the driving seat - if you don't drive you won't get anywhere.

Step 4: 2 days before renewal

Make your selection, pick your insurer and tell them the good news - you've just given someone commission so they will be happy. Get your cover started with a new insurer or renewed with your existing one, but at a reduced price than their first offer. 

By using this approach, you'll likely save a small packet. All it takes is a few phone calls which you won't have to make again for another year. And for an extra hundred euro or so in your pocket, it’s not that much trouble really, is it?


In the interest of full disclosure, I observed David Kerr, the MD of bonkers.ie, take this approach and save money on his car insurance. So before writing this piece, I decided to test it for myself as my insurance was set to expire at the beginning of February.

I brought my car insurance down from a renewal quote of €590 to a new premium of €440. The cover is pretty much identical – the only notable difference is that the deductible is €50 higher, but I’ve saved that and more with the cheaper insurance. I had to switch insurers but it was relatively hassle free and the new disc came in the post in a couple of days. I had remained loyal to my old insurer for years (through inertia more than anything else) and they rewarded me by increasing my premium every year. From now on I’m loyal to the best price and that’s it.

The whole exercise probably took about an hour and a half and the way I see it, I made the equivalent of €100 per hour for my efforts. Not bad at all.

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