Car Breakdown Cover Doesn’t Reward Loyalty

Drivers are up in arms after many have found that they are being charged more to renew their breakdown cover than new customers who have just signed up.

Many people have a long-term relationship with their breakdown cover provider, and they expect to be rewarded for their loyalty. But is loyalty becoming less important to these companies?

According to Times Money, loyal customers are being asked to pay as much as 56% more than new customers when they pay for their breakdown cover – and many worry that they’ve been forking out more than they should have for years.

Certain customers who discovered this and subsequently confronted providers such as the AA have been able to get their renewal premiums reduced.

Like car insurance, the cost of breakdown cover tends to go up every year, but as companies appear more eager to sign up new customers than to retain existing ones, they often leave a significant gap between what new and existing customers are asked to pay.

The UK’s two largest roadside breakdown or accident assistance providers, the AA and RAC, both currently offer discounts of more than 40% to new customers who buy online. This gives new customers cover for roadside repairs or a tow to a local garage from just £28.

But cancelling a policy and reapplying to take advantage of new customer prices isn’t straightforward. The RAC, for example, requires 120 days to elapse between a customer leaving the company and joining again before they can access new customer deals.

A spokeswoman for the AA commented, “We do offer first-year introductory discounts to encourage people to join the AA, but new members do not have access to loyalty services such as two additional call-outs per year, free access to our legal helpline, free 24-hour European cover plus additional discounts on a range of products and services.”

Moneyhighstreet comments: “Always make sure you know when your policy comes up for renewal – and when it does, compare prices online to make sure you’re getting the best deal. If you renew your policy by direct debit, it’s easy to forget how much you’re paying or not realise there may be better deals out there.

“Customers should also be more ready to contact their providers. As demonstrated by the Times, some customers who have called and challenged their providers over their renewal premiums have managed to get them reduced.

“As with car insurance, don’t forget to check your premiums thoroughly. The cheapest premium isn’t always the best as lower prices often mean key benefits are left out of your cover.”