Brits paying hundreds in hidden car insurance fees - top 10 tips to avoid being caught out

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Hidden fees
From cancellation fees to APRs
Top 10 tips
Another way
Get Cuvva

A new study has found almost 1-in-5 British drivers are being hit by hidden car insurance fees - with younger motorists worst affected.

Hidden fees

Millions of British drivers are being caught out by sneaky bills, with those hit shelling out an average of £123.40 every year. For those impacted between the ages of 18 and 24, the average figure is an eye-watering £334.40.

The study of 1,500 motorists, carried out by Perspectus Global on behalf of Cuvva this month, sheds more light on just how unfriendly and greedy the car insurance industry can be - something we want to change.

TL;DR
British drivers are losing millions of pounds each year on hidden car insurance fees. Always check your excess and read the fine print.

From cancellation fees to APRs

Cuvva’s study found 18% of British drivers are being hit by hidden fees. The most common fees are:

Adjustment fees: These sneaky fees are added to the bills of drivers who make changes to their policies midway through their contract. Cuvva’s rolling monthly contracts have no mid-term adjustment fees or cancellation fees. Of those drivers who said they had been hit by hidden fees, 36% said they had to pay adjustment fees.

Cancellation fees: Almost one-third (30%) of impacted drivers said they were hit by additional fees when trying to cancel their insurance. Cuvva never charges drivers for wanting to end their policy.

Add-ons: Motorists across the country are paying extra for everything from key cover to ‘enhanced courtesy car cover’ - it all adds up, and it can be incredibly frustrating. Our study found 28% of drivers who paid hidden fees reported being hit by add-on fees.

APRs: Your APR (annual percentage rate) is essentially the interest you pay while spreading insurance bills out over a year. Some companies charge eye-watering interest. Almost one-quarter (24%) of those who said they had faced hidden fees were hit by APRs.

Car insurance hidden fees

Get a fairer price ⬇️
Our new Smart Pricing feature factors how well you drive into your quote and could help you get a fairer price for car insurance! Learn more

Top 10 tips to avoid being hit

Our study shows, once again, how broken the car insurance industry really is. We’re determined to fix that. To help you avoid getting caught out, we’ve put together a list of 10 top tips. It’s time to put the customer first.

  1. Always read the fine print and terms of business agreement before taking out an insurance policy. This is where you’ll often find hidden fees.

  2. Request a full breakdown of fees before accepting a quote or renewing a policy. Your insurer should share these with you.

  3. Pay attention to the APR annual percentage rate if opting for annual cover paid in monthly installments. Consider insurance providers that offer monthly policies that don’t charge interest (👋). Some insurers charge up to 39% on top of the premium itself.

  4. Ensure your personal and driving information is correct before purchasing a policy. If your details change, inform your insurer ASAP. You might be penalised or, worse, left uninsured if your information is incorrect or out-of-date.

  5. Many insurers automatically renew your policy at the end of each year. Make sure you’re getting the best deal on your new premium and they’re not bumping up the price when you renew. From 2022 onwards, insurers will no longer be able to charge loyalty penalties, meaning their renewal prices will not be higher than if you were a new customer.

  6. The cheapest policy on a comparison website might set you back in the long run, as you might find you’re only covered for the bare minimum - meaning lots of potential for hidden fees and not being fully covered when you need to make a claim.

  7. Compare excess levels and cover levels, not just premiums.

  8. Make sure you know what the excess is up front and that you're comfortable and able to pay it if you have to make a claim.

  9. Look out for the typical hidden fees such as cancellation fees, mid-term adjustments, cooling off periods, black box installations and extra mileage fees.

  10. Self-service via an insurance provider app may help you avoid certain fees (some insurers may charge an ‘Administration Charge’ fee to adjust if the policy is changed over the phone). However, if you do it yourself via their website or app, the charge is often waived.

Car insurance hidden fees

Another way is possible

Freddy Macnamara, CEO at Cuvva said: “Average car insurance policies don’t suit modern-day consumers. Drivers want the flexibility to cancel a policy or make adjustments but in most cases, flexibility comes at a cost in the form of hidden fees.

“Cuvva is on a mission to simplify car insurance to better suit consumers' actual needs. Car insurance should be there when you need it. Whether it’s just an hour or continuous cover, and it shouldn’t be layered with unfair hidden fees, penalties and interest.”

Get Cuvva

At Cuvva we hate sneaky fees and we’ve designed a product that reflects this. Our rolling monthly contracts have no joining, cancellation fees or tie-ins. There’s no APR and you can still build up your no claims bonus (NCB).

Our short-term cover, with insurance from as little as an hour, is also quick, easy and transparent.

And to help you cut your bill further, with Smart Pricing, good drivers can save up to a third on their insurance. The better you drive, the more you save.

Updated on 29th November 2021