Ahead of a law change, Martin Lewis warns that cheap vehicle insurance may vanish ‘within weeks.’

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MARTIN LEWIS has warned some of the cheapest car insurance prices on the market may disappear “within weeks”.

In his latest MoneySavingExpert Money Tips email, Martin Lewis urged drivers to check deals now ahead of a major new rule change introduced in months. From January 1 2022, the Financial Conduct Authority (FCA) will bring in new car insurance rules to end price walking.

This will stop insurers from gradually increasing prices for those loyal to providers and offering the cheapest rates to new customers.

However, he has warned the new rule could see an end to “cheap switchers’ deals” across the board.

He said it is likely firms won’t just cut renewals to match new customers’ prices.

Instead, all rates will change to a new middle price point to bring existing and new customers into line.

This means new customers will likely pay more for cover if they switch providers under the new rules.

Martin Lewis has even warned rates may change before the rule comes into effect in January as insurers make preparations.

He said: “Rates may change before January, so checking now, while they’re still cheap, is safest – you can switch even if not at renewal.

“While the new regime officially starts in January, as it’s a big job, insurers will likely start to shift pricing algorithms sooner.

 

“So the clock is ticking and the cheapest prices may start to disappear within weeks or months.”

The FCA confirmed the new price walking ban back in May after the issues were addressed in a market study.

They said millions of home and motor insurance customers “lose out” if they renew repeatedly with their current providers.

The analysis found at least six million loyal policyholders would have saved £1.2billion if they had paid the average costs instead of inflated rates.

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The FCA admitted it was “likely” firms would no longer offer low priced deals to new customers.

However, they said the new system would save customers up to £4.2billion over 10 years.

Sheldon Mills, Executive Director, Consumers and Competition at the FCA said the changes would make the “market work better for millions of people”.

She said: “These measures will put an end to the very high. “Brinkwire Summary News”.

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