Car insurance: why moving quickly on new car cost me £150

If you need your car insurance policy to start quickly, then be prepared to pay a much higher premium.

After putting it off for as long as possible, I finally bit the bullet last month and bought a new car. 

Our Seat Ibiza had done a great job for eight and a half years, but it had become very clear that we needed something a little bit bigger.

Last year’s holiday to Gloucestershire had seen our growing kids cramped to almost farcical levels in order to fit in our luggage as well, and we settled on going for a Nissan Qashqai.

The purchase of the car itself went well.

We had done our research on how much a Qashqai of that age and mileage would typically fetch and were confident that we had got a good deal.

We also stood firm on resisting the enormously expensive extended warranty that the various salespeople were determined to try to talk us into.

The sale moved incredibly swiftly ‒ we first saw the car on the Tuesday, agreed the deal on the Thursday, and drove it home the following day.

All in all, I was chuffed ‒ we had got a good deal and sorted it all within a very short timeframe.

Unfortunately, there was one area where acting so quickly actively cost us ‒ car insurance.

Doing your research

As any driver knows, the actual list price is only one cost to consider when purchasing a new motor. The other big expense is likely to be your car insurance, an unavoidable outlay.

Given this, it’s a good idea to do some background research on what the cover is likely to cost you long before you head to the showroom.

It’s something we did too, using a few different price comparison sites to get a more rounded idea of price.

In each quotation, we set the start date for the policy as three weeks away.

At that point, I was resigned to the process of buying a new car being a lengthy and painful one.

And the best price we found came to a little over £300, which isn’t all that different from what we were paying already.
 

Last-minute insurance

Of course, by the Thursday of that week, things were rather different. Far from a protracted sales experience, we had agreed a price, paid the deposit and were all set to complete the deal the following day.

So I went back to those quotes, and made one small adjustment ‒ the date that we needed the cover to start.

After all, we didn’t need the policy to begin in three weeks’ time, we needed it from the following day.

And an amazing thing happened. The premiums ROCKETED. Suddenly the best prices I could find came to £450, a jump of around 50%. 

Because of the speedy way in which the deal had been agreed, we faced stumping up an extra £150, a sum of cash that isn’t exactly small change at the best of times, let alone at the moment.

Why do car insurance costs change based on the start date?

Of course, the obvious question here is why does the start date make a difference? 

There are all sorts of different factors that insurers take into account when calculating the price of an insurance premium, from the car’s age and mileage to your address.

Obviously, your driving record will have an impact too ‒ if you have points on your licence you will be seen as a greater risk than a driver with a spotless history, for example.

And bizarrely enough, the date of your policy seems to impact how risky the insurer believes you may be as a customer.

The thinking goes that if you purchase your policy a few weeks before the date you need it to start, then you are likely an organised and sensible person. 

By contrast, if you sort the insurance at the last minute, then you may be less careful. Some insurers in the past have suggested seeing higher claim rates for customers who purchase their policy at the last minute.

Previous studies have suggested that around three weeks before the start date is something of a sweet spot when it comes to getting the best possible price for your car insurance.

Be warned, you may actually get a higher quote if you try to arrange cover earlier than this ‒ fewer insurers are willing to run quotes for a longer period before the start date.

Learning lessons

While this massive premium did hurt, the £450 quote was actually the best I found ‒ I’d have paid even more with other insurers. It’s a useful reminder of how important it is to shop around and compare deals, even if ‒ as was the case this time ‒ you end up with a quote that’s eye-wateringly high.

Unfortunately, there was nothing I could do about the fact that I needed cover with such a soon start date, however it has served as motivation to set a reminder in my calendar so that when we get towards renewal time I’ll be able to get my quotes around that three-week sweet spot.

By being prepared, I can ensure that I won’t get whacked with another ‘last minute’ premium penalty.