Wacky world of car insurance

clairehi

Have just insured my car today for £350 with Norwich Union Direct, with £35 Quidco cashback.

This compares rather favourably with my renewal quote of £603 from Ford Insure underwritten by ...you guessed it, Norwich Union.

Astaroth

It is actually fairly common for subscription based services.

I have a magazine subscription that costs me £40 a year. In year 1 when I subscribed I got a "free gift" with I wanted and know costs £50 for me to buy in the shops (though not the £65 RRP they quoted).

Year 2 comes along and my subscription will auto renew however if I cancel and take out a new subscription I again will get a free gift worth about £50 - this years one would be useful but not as desirable but sell on ebay for up to £60.

Companies (especially motor insurance) will lose money on year 1 business to gain new business which they hope will stay for more than 1 year where they can then recoup their money

dunstonh

Ford could be taking a larger chunk of commission and havent negotiated as favourable terms with NU than the other company.

You can go to 20 different IFAs and find 20 different levels of pricing for life assurance (for example) when using the same company and terms. Financial services products are not that much different to other retail products. Economies of scale and profit margins all impact on pricing.

clairehi

Yup, I think youre both right!