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Martin Lewis has revealed the “absolutely ridiculous” rule car insurance firms use to charge motorists double price on their premiums.
The Money Saving Expert founder stressed firms will charge motorists more the later they leave a renewal as this would bump up their “actuarial risk”.
Securing a new deal weeks before an existing contract ends is likely to show a driver is less rushed and could pay off with better prices.
Stunningly, Martin even admitted some companies were charging up to 100 percent more for those who left it right until the last minute.
As part of his analysis, Martin also revealed the ideal time motorists should renew their policy to secure the cheapest agreement.
Speaking to ITV’s Tonight programme, Martin explained: “The perfect time to get car insurance is 23 days before your renewal. That’s not for your renewal quote, that’s for going onto comparisons to get different quotes.
“It seems absolutely ridiculous but insurance pricing is all about actuarial risk. And what their risk shows them is the type of people who get car insurance early are a lower risk so they give them a lower price.
“You might pay nearly double if you wait until the last minute to get your car insurance.”
Money Saving Expert has previously stressed that motorists could save hundreds of pounds by acting quickly and securing a deal around three weeks before a renewal deadline.
Analysis of 70 million quotes across a series of comparison sites found the average quote made on the day of renewal was £1,198.
However, road users would be able to get the same contract at just £694 23 days earlier.
It means motorists would save a whopping £504 on a policy in a major boost for cash-strapped motorists.
Specialists at MoneySuperMarket have also suggested securing a policy between 15 and 29 days before renewal would likely pay off.
Leaving it past this stage becomes risky but it is still likely to be cheaper even a week or two before renewal compared to what motorists could eventually pay.
It means those who have missed the 23-day mark should still act quickly as a form of damage limitation.
They explained: “According to our research, car insurance premiums start to go up within two weeks of your current policy ending, and the sharpest rise comes around three days before.
“So as long as you buy before then you should avoid the big price hike reserved for those who leave it until the last minute.”
