In our massively cluttered and busy lives, we can easily forget about things, such as that frozen lasagna left in the microwave just 30 seconds ago, or that auto-renew on your car insurance which, if you had known about it, you would’ve opted out of.
Don’t get us wrong; auto renewing your car insurance is pretty much a blessing because you don’t want to inadvertently leave yourself unprotected and land yourself on the wrong side of the law, right? Right. Now that we’ve got that established, auto-renew can be a curse if your memory prowess is the size of a pea, or if you’ve been mistaking the renewal reminders for spam. Guilty as charged? Then be prepared to pay the following five prices.
1. Cancellation charges
Can you imagine you only came to know about your auto-renew snafu well into a policy you didn’t even need? Not only would you suffer the sunk costs of irrecoverable premiums paid, you might have to bear cancellation charges. At best, you would only get back an amount based on the number of unused months. You could’ve saved yourself all that heartache by implementing this simple trick to circumvent the inevitable slip of the mind: immediately set an alert on Google calendar (or other apps you might be using) before the expiry date.
2. Duplicate payments
In the remaining half of the year, a line-up of exciting models such as the Porsche 718 Cayman, Audi RS3 and Volvo V90 are going to hit the Singapore showrooms. Perhaps you’re eyeing one of those, or all of them to add to your condo car park.
As per the law, you’re required to insure your cars. Did you stop to think that the insurance on your old car might be on auto-renew? Of course you didn’t. Little wonder that duplicate expenditure keeps popping up on your bank statement. Do yourself a favour, cancel that auto-renew feature and save the money for something else. Like the new Jaguar F-Pace or something, in case you get sick of your new car.
3. Insurers want you on auto renew
Silence is golden for car insurers. If you don’t take responsibility of the state of your car insurance, the insurer is just going to assume they have a fiercely loyal customer in you and quietly let your GIRO payment run for the next policy term. Despite legitimate complaints that you’re billed for a new subscription without consent, the onus is on you to opt out in the first place. It’s the little things that add up; owning a car in Singapore is already exorbitant enough, don’t let things like forgetfulness, assumptions and cancellation charges pile on the mounting debt.
This car insurance neglect is probably a lot more common than you think. For example, it was reported in the UK last year that an estimated £1.3b each year is wasted just because motorists forgot to cancel auto-renew. That’s more than enough to buy you several garages filled with supercars.
4. Lifestyle changes
You might have seen the tacky slogans on campaign posters, such as ‘The only rubber I’m burning are my soles’. Singapore is going full steam into a car-lite society, and maybe you too have decided to go ‘lite’ on your financial commitments and do away with your car. Wise decision, by the way.
After putting up a listing on an online car mart, you managed to net a reasonable deal and sold your car at a magnificent loss, obviously. You finally rid yourself a great piece of liability, and the monthly maintenance can now be saved for rainier days. Wait, you seem to have forgotten something, haven’t you? What was that? Right, it’s the car insurance, isn’t it? You forgot to switch off the auto renew.
Congratulations. You just auto-renewed yourself into paying for something you don’t even own.
5. You’re paying more than you should
If you have really deep pockets and car insurance premiums are akin to pocket change, then sure, go forth and leave the auto-renew in the rear view mirror. But there is the other group that holds the purse strings like their lives depend on it, so much so that a slight increase in premiums is enough to send them into panic attacks. This is exactly what happens if you continue to leave your insurance on auto-renew, because it robs you of the opportunity to shop around other insurers for better deals.
There are a variety of factors that will contribute to higher premiums on your next term, like a bad history of laissez faire driving and accidents. Or you might have modified your tame little sedan into a performance-driven racer (you know, those with high spoilers, black rims and a cheap ostentatious snarl). Either way, you would do well to rethink that auto renewal. You’ll never know, there could be another insurer out there who is more partial to your driving tendencies.