Martin Lewis has explained drivers could be paying almost £100 more for cover if they stick with their existing insurance firm for just five years. He added the increases were down to a simple policy known as ‘price walking’, where insurance firms increase payments for existing customers by a small amount each year.
To avoid being caught out, he has urged drivers to “never auto-renew without checking prices” and consider switching for a better price.
Speaking on the Martin Lewis Money Show, he said: “The first thing to say is talking beats price walking.
“Price walking is the fact that when you go to an insurer if you stick with them each year they walk the price up by £20 or £30.
“So the longer you’re with them, the more you pay.
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“That is a big issue, loyalty does not pay here.”
Confused.com has also warned there is generally “no real benefit” to being loyal to your insurance provider.
They warn drivers are more likely to save money by switching to a different company at the same level of cover.
Drivers can transfer their no claims bonuses which could help them get a much cheaper deal elsewhere.
The FCA estimates the proposals could save consumers up to £3.7billion over the next 10 years.
Christopher Wollard, Interim Chief Executive of the FCA said any updates would ensure firms offered “fair value” to road users.
He said: “We are consulting on a radical package that would ensure firms cannot charge renewing customers more than new customers in future, and put an end to the very high prices paid by some long-standing customers.
“The package would also ensure that firms focus on providing fair value to all their customers. We welcome feedback on the proposals.”