Been with the RAC for a few years now and John and myself have the personal cover with home-start,roadside rescue,onward travel,recovery and key return. My renewal came through yesterday as it's due on the 10th October £194.99. I thought .....shit!! There's no way I'm going to be able to afford that this year being out of work. So I rang them up to change my cover,I wanted to just have my car covered because that is what I would have to rely on if I do go back to work. The lady on the phone was very helpful,and as she was trying to get the price down for me I scanned through my cover documents. £50 admin and arrangement fee WTF !!!???? So I asked her why,and she said it's on everybody's cover and basically that's the way it is!!! Told her that it's ridiculous and if you don't change anything about your cover then why do you charge it? I could see I was getting nowhere with her on this fee,but I did tell her that I'm not working and wanted the cheapest cover possible for the car as it's getting on a bit (2004) and the AA were badgering me to go back to them. So............. she comes up with £77.03, I said pardon??? She said I can keep your cover EXACTLY the same as it is,which is the personal cover for me and John and because the onward travel is on 'special offer' she can do the year for £77.03 !!! Well of course I bit her hand off.......just had the documents sent through this morning,and everything is what it should be along with the price. As you can imagine I'm well happy,but £50 of that was this 'admin fee' which meant that my cover costs £27.03......you can't help thinking what a fucking rip-off companies are and just how much they completely shaft you. Really bittersweet,I couldn't thank her enough,but at the same time I felt like telling her to do one you bunch of crooks....even better,hubby's going to pay it for this year If your breakdown cover is due for renewal take heed and I hope you can get an amazing/unbelievable discount like i did
The AA are exactly the same and they won't deactivate auto-renew, you have to ring them up and tell them you don't want to renew (or not on those terms), so if you're away when the renewal date comes up and you don't spot the price hike and put a stop to it they'll help themselves to a massive overspend from your credit card - and presumably charge you a stiff cancellation fee if you want to stop it afterwards. That shouldn't be legal in my view. Sometimes its better to just tell them you don't want to renew, let it lapse and then take the sweetener rate as a new customer.
All companies have to allow single payment non-auto renew. But they may change an admin fee.... The admin fee is for two reason: 1) legal requirement to set out what's in it for the insurer/broker 2) they don't pay IPT on that bit I was part of the team that implemented the fees years ago. Enlightening...
It seems to be a fairly common business practice. Only if you phone up and moan do you get a good price or a discount. It's not in the company's interest to give all their customers the lowest possible price. They work on the assumption that w% will pay the high price, x% will moan and get the low price, y% will not renew and z% will be new customers (paying a low introductory offer price not available to existing customers). In this Internet age of information at your fingertips and no need for human to human interaction the strange thing is that to get the biggest discounts you have to talk to a person.
