general questions
Anyone who owns a car definitely expects vehicle insurance costs to increase. Therefore, changes for the new year can be beneficial. What should you pay attention to? And how else can you save money?
Every car owner needs insurance: motor vehicle liability. There is also voluntary comprehensive insurance, which can be used to cover damage to your own vehicle. But no matter whether it’s just liability insurance, partial or comprehensive insurance, drivers should prepare for much more expensive insurance premiums in the coming year.
According to comparison portal Verivox, price increases are expected to average seven percent. According to the ADAC Autoversicherung survey, almost every second driver in Germany is considering changing their vehicle insurance.
Why are contributions increasing rapidly?
One of the reasons is the sharp increase in repair costs at workshops. According to the General Association of the German Insurance Industry (GDV), insurance companies pay an average of 202 euros per hour for mechanical, electrical system or body work. According to the Federal Statistical Office, car maintenance and repairs will become 48 percent more expensive between 2017 and 2024.
This is caused by an increase in spare parts prices and an increase in labor costs. Insurance companies ultimately pass on more expensive repair costs to their customers.
Why should you change insurance?
Because insurance company rates are sometimes very different. According to the Association of Federal Consumer Organizations (vzbv), there may be a difference of several hundred euros between the cheapest and most expensive rates of liability insurance with partial comprehensive insurance for new drivers. In principle, the price also varies depending on where you live, the age of the driver, the type of vehicle and the number of kilometers traveled – all of which can change over time.
At the same time, many providers lower prices for new customers during the switching season. “When, like now, some insurance companies lower their prices, it is worth comparing,” explains insurance expert at money guide Finanztip, Kathrin Gotthold. “Especially those who have been loyal to their car insurance for a long time usually pay more.”
However, those who are interested also have to be careful with cheap sign-in bonuses. Rates are often raised significantly in increments over that time period – in the hope that customers will be too lazy to switch.
Where can you compare them?
The comparison can be made, inter alia, on the relevant portals on the Internet. However, consumer advocates point out that portal providers sometimes only include certain insurance companies and rates for comparison. Therefore, it may be beneficial to ask for a quote directly from the insurance company – “online, by phone, or from a nearby agent,” according to vzbv.
How long can I cancel?
Since the insurance year usually ends on December 31st and cancellations usually have to be submitted to the insurance company one month in advance, the transition season usually lasts until November 30th. Because today falls on a Sunday in 2025, the deadline this time will be extended to December 1.
However, there are also contracts where the insurance year starts at a different time of the year. Therefore, insureds should check the notice period carefully. In addition, according to Stiftung Warentest Finanz, termination of employment may only take place after a new contract has been completed.
What should insured persons consider when considering possible changes?
Consumer advocates point out that it is advisable to scrutinize each clause with a new provider before entering into a contract. For example, there are currently service providers who experience extreme downgrades due to damage, which can quickly make insurance bargaining an expensive burden.
Apart from price, performance and service must also be compared. According to ADAC, there is a lot of potential for savings when it comes to motor vehicle insurance, but adequate insurance coverage is “absolutely necessary”. Experts recommend that the sum insured should be around 100 million euros for property damage and eight to 15 million euros for personal injuries.
Consumer advocates also recommend insurance against gross negligence. Then the insurance will also pay if an accident occurs if you run a red light or drive too fast. This clause doesn’t just apply if you use drugs, drive drunk, or if you leave your keys behind. Otherwise, when it comes to comprehensive insurance for a new car, you should ensure that the insurance company pays the new value for as long as possible in the event of a total loss – optimally up to two years.
Can you save money just by switching?
No. ADAC states that significant savings can also be achieved by optimizing existing contracts. In terms of payment intervals, for example, the cheapest way is to pay the entire annual amount up front rather than monthly or quarterly. This can often save up to five percent on insurance premiums.
Insured parties can also benefit from higher deductibles for partial or full comprehensive insurance and limitations on the number of drivers. Much cheaper contributions can also be made via telematics tariffs. Driving behavior is monitored using a small box in the car and a connected smartphone app.
Workshop commitment, where car damage is repaired at the insurance partner’s workshop can also have an impact. However, you can no longer choose your own trusted repair shop. The number of kilometers traveled each year also affects insurance premiums.
With information from Till Bücker, ARD’s financial editorial team.
