/ Motoring

Why being loyal drives up the cost of breakdown cover

Our latest research into car breakdown cover has found that renewal prices can leave you out of pocket. Is it right that existing loyal customers are asked to pay more for breakdown cover than new ones?

We have just completed our annual survey of car breakdown cover, comparing companies like the AA, RAC, Green Flag and Britannia Rescue to see if any of them have made the grade as a Which? Recommended Provider.

Our surveys cover waiting times, repairs, customer satisfaction and value for money – it’s this last one that I’m feeling slightly irked about today.

Put simply, I don’t think the costs of breakdown cover are transparent enough. Headline prices look tempting (just £23 for a year’s roadside recovery with Green Flag, for example), but many providers only offer a discount upfront if you agree to automatic, year-on-year renewal.

And your premium’s likely to go up quite a lot after that first year is up, unless you shop around.

Don’t just accept your renewal quote

People regularly contact us complaining that their breakdown renewal premiums are far higher than the previous year’s cover. So we used a real case of someone renewing with the AA.

Our case study had cover for two people and two cars, with roadside assistance, and AA’s ‘relay’ and ‘stay mobile’ cover. The renewal quote they received was £205 – £65 more than the £140 they would pay if they took out a new policy with the AA online. This quote was also £100 more than they would have paid with Aviva, and £85 more than Britannia Rescue.

So our case study called the AA and pointed out the discrepancy between the renewal quote for loyal customers and the price charged for new ones. After a short delay, the AA offered to cut the price to £135 – not quite as low as elsewhere, but a hefty discount nonetheless.

Shop around for the best deal

This problem of inflated renewal premiums isn’t confined to breakdown cover, of course. I recently saved money on my home insurance renewal by entering my details into a comparison website. I ended up insured by the same company, but saved £40 in the process – not bad for 10 minutes work.

So, always shop around and consider checking cashback sites, such as Topcashback or Quidco, for their latest deals.

Has your renewal price for breakdown cover gone through the roof? Let us know how much you were quoted, and whether you were able to make a saving after a bit of haggling.

Comments
Guest
Angela C says:
29 September 2015

My breakdown renewal was due in August but I never received the renewal price letter. I just saw on my bank statement that the renewal money was taken as usual by Direct Debit but it was 20% dearer than last year whereas earlier years’ increases were about 8%.
Whrn I rang to complain they said they had written to me in July and I was too late to get out of the renewal as the 14 days cooling off period was over. They could not explain why the price was such a huge iincreas other than to say they now charge a penalty of 1.35% for DD by Credit Card. Huh. If I had receied the renewal letter I would have jumped on it in time. As it is I am tied in at a rip-off price and they do not even care that I have declared categorically that I will be leaving them when the year is up.

Guest

I have been with the RAC for 25 or more years without ever having claimed. Renewal is due on 29th November. Today I received the renewal quote – an increase of 95.7% – yes I did type that correctly. I was gobsmacked and rang up to ask why before I left them. There was no reason advanced for the increase despite my loyalty and claim free record (“that doesn’t affect the premium” I was told!). The “agent” couldn’t do anything about the price but could offer a 3 month extension. I voted with my feet and got a better deal from my car insurer, LV. So the RAC lose out on my low risk income – serve them right is my thought.

Guest

I got my AA renewal yesterday for £204.02 up from the £145 odd that it was last year so I rang them and got my renewal reduced to £153.02. I’ve been with the AA for the last 8 years and I can’t fault the service I’ve had but I did check out the RAC and Green flag for quotes who offered similar packages for £146 & £135 respectively. I used this information in my negotiation and it helped. It does seem daft that they get us to jump through hoops or hope that we won’t notice that we are being shafted with the initial renewal.

Guest

My AA renewal has also just come through at £267. The annual brief discussion has reduced it to £178, even though in the last year I did have 3 call outs. 2 were broken belts; the AA no longer keep the plethora of belts needed to be able to repair. The other was a failed vacuum brake pump. So all resulted in transport to our local repairer.

Guest

“Get 25% off a Which? gift subscription
Give someone the gift of Which? this Christmas by treating them to an annual magazine subscription. Choose from five magazines and buy as many subscriptions as you like. If you order by 31 December 2015, you’ll save 25% off the normal price of every one.”

From the introduction to this convo:
” Is it right that existing loyal customers are asked to pay more for breakdown cover than new ones?”
Do some existing loyal customers of Which? now need to negotiate a reduced price for their renewals?
🙂

Guest

I suppose with Which? it’s a sprat to catch a mackerel, and we all benefit from economies of scale.

I think the AA’s conduct in your renewal case was deplorable, however. It shows that they think you need them more than they need you and will fall for the first renewal quote. Some people are not up to dealing with things as capably as others and could get ripped off. It used to be an honourable association but is now just a branch of commercial low-life.

Guest

The AA’s subscription for a new subscriber online for my cover was £150 (excluding. I admit, free things they have added for loyalty over the years, but essentially things I would not buy and don’t use) . I go through the same process each year. So like Which?, a spraat to catch a maackerel.

My son renewed his RAC cover and got 25% discount when he rang them up,

Which? is just joining in the same game, aren’t they? Presumably the recipient of the gift subscription will pay 33% more next year if they wish to continue, on what is already, apparently, one of the most expensive consumer association subscriptions in Europe (I haven’t checked this but I seem to remember a respected contributor making this comment).

Guest

My AA auto-renewal quote came through at £223.99 including Roadside, Home Start and Relay. After checking pricing as a new customer with other organisations, the best quote was RAC at £128.99 with a £30 Amazon gift card (£98.99 without the gift card). After some gentle haggling with the AA, the price was reduced to £140. After pressing a little more , the customer service agent spoke to his manager and this was then reduced further to £128.99, matching the RAC figure, but as a Silver Member, this includes various benefits and discounts (restaurants, tyres etc), where I might receive more savings than the RAC’s Amazon voucher offer. All in all…£95 (almost 42%) cheaper than the auto-renewal fee and I retained my Silver Membership benefits!

Guest

I had a renewal 39.75 per month, gross about £475. On line £205 ! Extra benefits not worth 270.
Called and they gave me it for £215. 55% off!

Guest
James says:
11 February 2016

Hello,

I used to work for RAC. The system available to all renewal agents allowed you to take rescue to roughly £20 and recovery to roughly £40. With a supervisor, prices could fall even lower. Based on my experience, I’d say it is best not to get your cover online, you wouldn’t get the best price. Go through a sales person. I have seen premier rescue as low as £50. People who complained got what they wanted. I have processed elderly people happy to renew prices upwards of £200 with no call outs. There was no statistical reason for price rises.

Happy hunting.

[This comment has been tweaked to align with our Community Guidelines. Thanks, mods]

Guest
Roger Walter says:
12 September 2016

RAC Breakdown Cover renewal notice now excludes European Cover but premium increase of 42%. So much for loyalty and membership!
Answer: switch to Kwikfit at just over a quarter of the price and in future renew annually after checking the prices.

Guest

KwikFit have taken over from The Green Insurance Company so Breakdown cover has gone up from £33 to £45. They have ripped me off with unnecessary/unwanted extras with tyre changes so I think I move on.

Guest
JL1954 says:
14 November 2016

Rise from £57 last year to £130 this year. Same vehicle. Same drivers. Same circumstances. And no claims for a couple of years

I asked why.

“Because your car has gone over a threshold.”

Asked what are the thresholds? “0-6 yrs and 6-10 yrs”.

As my car has just turned 7 years old, how does that work?

Guest

They obviously don’t want you, JL1954, so take the hint and insure your motor car with another company.

Guest

If this is breakdown insurance, check what a competitor and your existing provider offers online to new customers. Then phone your existing provider to tell them you are thinking of leaving. They will very likely reduce the price significantly; hold out for something close to the competitor’s price.

Guest

Does anyone know of companies that offer no-claims discount on breakdown cover? It would be good to promote good practice.

Guest

The AA discount their breakdown cover but you do have to ask for it.

Guest

I did not know that, possibly because I have never been an AA customer. When I am pestered by people promoting breakdown cover (e.g. at supermarket entrances and motorway service areas) I usually point out that I’m looking for a company that offers NCD. No AA representative or anyone from another company has said that this is available. My last call-out was in 1989, when my petrol car started to sound like an old London taxi.

Guest

I think I have seen good introductory deals for the AA in the past. The renewal is always high, but they are open to discounting it if asked over the phone.

Guest

I am not aware of any discount for no claims from the AA. However you will get a “discount” on the renewal price by asking, usually very substantial, particularly if you point to theirs, and competitors, online offers. But if you do know of an ncd alfa I’d be pleased to hear of it.

Guest

Sorry, bad wording on my part as I was just referring to a general discount rather than a no-claims discount.

Is there such a thing as a genuine no-claims discount these days or is it given on high premiums as a persuasion to buy?

Editing…
And I have just read Beryl’s post so perhaps NCDs do exist.

Guest

On breakdown insurance each year my renewal comes in at a silly (high) price presumably in the hope, with autorenewal, it will be overlooked. I haggle, briefly and politely, and get a substantial reduction. I don’t regard it as a discount.

The AA allows 7 call outs a year for joint membership, and 8 for family membership. after which additional premiums become payable during the membership year,

Guest

I consider it underhand to quote an inflated renewal premium in the hope that customers will renew without question, so what I am interested in is genuine no-claims discounts.

Guest

In relation to breakdown cover, is anyone aware of a provider that gives ncds?

Guest

A quick search gives Autonational Rescue who give an introductory 25% no claims bonus, an extra 3 months breakdown cover free when joining online and 50% discount on an additional vehicle. You can also benefit from protected 25% no claims bonus.

I have never heard of them before though !!!

Guest

Wavechange, have you tried NFU? NCD starts at first premium year 30%
gradually increasing to 67% for 7 years. I am not sure how their NCD affects annual premiums but they do come with a Which! recommendation (as you know!) also 5 star by independent financial research co Defaqto.

If you haven’t already done so, check out their website:
nfumutual.co.uk – Car Insurance.

Guest

Thanks Beryl – I am already with NFU Mutual for both car insurance and breakdown recovery. I don’t know what will happen to the premium for the latter when renewal time comes round.

Guest

I received my renewal notice for car insurance with breakdown insurance attached. The price for breakdown had risen to match that of the “big” providers and was with Green Flag. As it turned out I decided to change my insurer and breakdown cover. There is no bonus for loyalty but a bonus for being vigilant.

Guest
EmBee says:
1 January 2017

At the time of my renewal the AA sent through a letter congratulating me on being upgraded to silver membership. Suspicious, I checked how much they had taken from my account – £215, £100 more than last year. It’s New Year’s Day so they’re not open for me to rage at them, I’ll save it up for the 3rd…

Guest
Russell Taylor says:
16 April 2017

Just had my renewal through for Green flag breakdown cover who I have been with for many years. On opening the letter found out they wanted £130 for their recovery plus but on the web site I got a quote for £62.70p. Gave them a call and I was told they would give me the lower price, when questioned as to the massive difference, the response was that was for new members but they would give me the lower price. I politely told them that was taking the **** out of people especially if you are on auto renewal as it would go unnoticed until you checked your bank statement. How many other people have been conned like this without questioning the price. As in many instances these days it does not pay to stay loyal to companies who eventually rip you off.

Guest
sue says:
27 July 2017

Agreed. We’ve been with Green Flag for a long time. They try this trick on us every couple of years, by putting up the premium by as much as 50%. Each year we take out cover online as a new customer. This year it’s gone up from £105 to £211 – a 100% increase on last year. If I go online as a new customer, it’s £85. This is why I don’t allow auto-renewal. It’s a disgrace how existing customers are treated.

Guest
Karine Burns says:
27 April 2017

I just got my renewal through from the AA = Gold Cover for me and my husband for £294 having been with them for 7 years – I couldn’t believe it. I went online and got a quote for £169 for the same level of cover and got quotes from other providers which offered similar prices too. I then phoned them and told them how annoyed I was considering that we had been them for 7 years and had only used the service 2 in all those years. The advisor did match the online price but you shouldn’t have to phone up to complain before you get a fair price. I would have gone with StartRescue but they don’t seem to offer a Relay equivalent. So, it pays to be vigilant and I do comparisons for most of my utilities and insurances every year and typically save at least 10% each time.

Guest

I could not recommend AA. When I was a member and once called AA out, the mechanic failed to notice my ford fiesta wiring harness was rubbing on the exhaust. He towed me to get it started and then sent me on my way. Three miles later the wiring harness was on fire.

Recently I’d left my Discovery 3 standing for 2 months. I got a jump started and went for a 10 mile drive, stopped at a pub and then found the battery dead. My passenger called the AA. The mechanic said the vehicle was fine but the battery was useless, despite being told it was under 2 years old and under warranty. Being a bank holiday weekend, and I needed the vehicle, I bought a new battery from Halfords. Before fitting the battery the car started to charge and I found the battery was perfectly usable.

Guest

The electrical system of modern cars gradually drains the battery and if the battery is left discharged it can become sulphated quite quickly. A battery tester would probably show that the battery is unserviceable. In some cases, batteries can recover, but there is no certainty of this and the mechanic would have no way of knowing. If a car is left unattended then the battery should be connected to a charger designed for the purpose (definitely not a standard charger, which would wreck it) or disconnected. Allowing a car battery to become discharged constitutes abuse and would not be covered by warranty.

I wish that car manufacturers would design their vehicles so that leaving them for a couple of months does not run down the battery.

Guest
TERRY WHITBY says:
16 May 2017

Been with the AA for 23 years I was paying £328 and its just gone up to £425 didn’t notice this until I read my bank statement today…

Guest
GDC says:
21 May 2017

Been with RAC for over 20 years. Renewal quote came through at £208.96 including a fantastic discount of £6.22. Went on-line for comparable quotes; £78.10 from Green Flag and £89 from AA. RAC comparable price for new members was £130. Asked RAC to match in my renewal, not interested and told I couldn’t take out new membership for 60 days. Just to say I will not be staying with RAC.

Guest
SandyB says:
20 May 2017

I have now come to the conclusion that car insurance is just one big con. Been with Direct Line for years and paying over the odds on my premiums. Had a no fault accident back in December and stupidly allowed my own insurance co. to put it right. Big big mistake, should gone with the other parties insurance, as Direct Line took my car and ruined it even more. Still waiting now for it to be put right. It’s been a totally stressful nightmare and Direct Line don’t seem to give a damn!

Guest
David Strachan says:
18 August 2017

I have been with the RAC since 1964 and have just received my RAC renewal notice and it has increased from £192.00 to £252.99. £50.00 of this is due to the RAC now having the policy arranged by RAC Financial Services. who may charge a fee for providing these services to you. They state in the leaflet that ” you will not pay an additional amount for your cover but how much you pay us to arrange this “. There is a breakdown on the payment schedule that Arrangement and administration fee for your Roadside & at Home Rescue is £50.00. If the RAC is making this change for their benefit then why have they passed the charge onto their customer?
David S

Guest

That is rather a lot.

Have you tried phoning them for a better price? … I was going to renew my insurance with you but it has gone up rather a lot ….. I can get it cheaper….. I have been with you 53 years….

Guest
keith Clark says:
26 August 2017

Been with Greenflag for four years for one small car and one driver last years price was £158.77 no call out last year but renewal quote is £216.00 On phoning them they reduced it by half to £113 but no longer trust them so an changing

Guest

It might be worth considering opting for cover as part of car insurance, Keith. Cover may be different and you don’t have any say in the breakdown company they subcontract to, but it seems a cheap option. I have not had a breakdown since 1989 and hate paying for cover, but cannot afford to be without it in case something major happens.