Would you buy the first car you saw in the first showroom you stumbled upon? No, most of us look at car magazines, compare prices at dealerships, car supermarkets and even the Internet! We only pause to buy when we’re sure we’ve found the best car for the lowest possible price package.

But when it comes to car insurance, all that inbred nous flies out the door. It seems that many simply hate haggling for car insurance! Research shows that 23% of us just sit with our feet up and automatically stay with our previous insurer.

The cost of failing to engage our money saving instincts costs us dear. If the renewal premium comes in at 5% or even10% higher than last year, many just accept it. Bad move! By shopping around the average motorist would save £55 – and that’s without the additional online discount!

Insurance companies frequently offer their less competitive pricing to existing clients. Awful isn’t it? They’re relying on your apathy to improve their profit margins.

There are now around 100 car insurers in the UK all eager for your business. Competition is so strong that for the last 2 or 3 years premiums have been static. That very much falls into line with the boom in car insurance on the Internet. Over 2.25 million motorists buy their car insurance online and that too has hotted up the competitive fervour in the marketplace.

Internet sales are growing rapidly, reports this week suggest 10% of retail sales - and it’s not surprising. In fact it’s share of the insurance market will be even bigger. That’s because the Net’s quick and generally easy to use. Surfers can check out specific insurers or go to comparison web sites or use web sites, like ours, that recommend specific insurers for specific categories of driver. It doesn’t half beat a morning down the high street or trolling through yellow pages. And it’s certainly better than fending off Indian call centres!

New insurance products such as pay-as-you-go, a multi-car policy and the appearance of new niche market insurers such as Sheila’s Wheels all point to a further stiffening up of competition within the market. And this indicates that now’s a good time to go car insurance shopping.

But there are warning clouds for consumers. Pips are beginning to squeak at the insurers as a result of accelerating claims, placing doubts over their ability continue to hold down prices much longer. The cost of settling personal injury claims is rocketing at 12% per year whilst accident damage is costing around 5% more per year. The increase in the average cost of repair has far outstripped the savings from decreases in the number of accidents.

Says Ian Crowder of the AA, “If we don’t start to see modest price increases, then there could well be an unpleasant and sudden price hike. That will not be good for the industry’s reputation or for customers”.

We say, let’s take our chance. We’ll continue buying online!

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