The RAC has been accused of trying to rip off a long-standing customer by demanding £205 for a basic breakdown recovery annual policy – then immediately offering to cut it to £120 when he rang up to complain.
A new customer signing up to the RAC can buy what looks like the same cover for £100, so this would appear to illustrate the dangers of allowing a policy to automatically renew each year without checking that what you have been offered is a good deal.
Mick Farrant from north London says he wants to alert other RAC customers to what happened to him. He also says that after he shopped around he found cover that included home start from his insurer for just £80.
The RAC is the latest company to be accused of pushing through renewal prices that are out of kilter with the rest of the market in the hope the customer will blindly pay up, perhaps assuming that the increase is somehow justified.
In the past, Guardian Money has highlighted how the AA has sent similar letters. Some insurers – particularly home insurers – have also adopted the practice of quietly pushing up premiums to the extent that some households have found themselves paying £2,000 a year for cover that could be bought for £300.
Farrant’s case is a reminder that breakdown recovery renewal notices should be treated as a reminder to check that the price you have been offered is competitive. And never agree to have your policy automatically renewed.
“I have been a ‘member’ of the RAC for well over a decade and have had no recourse to use its breakdown service that I can recall in that time. When I rang up to complain, the RAC person I spoke to blamed the new price on a computer-generated letter – as if the computer had come up with the increase on its own – and immediately offered to reduce the charge to £120. If I hadn’t been around and hadn’t seen it, the policy would have automatically been renewed at over £200. Companies that do this really annoy me,” Farrant says.
Spurred into action, the retiree, who owns a six-year-old Ford Focus that is solely used by him and his wife Dinah, decided to switch to cover bought from LV= for £80. Unlike the RAC cover, his new policy includes home start, where someone will come to his house if, say, the car has a flat battery – one of the most common reasons people call out a breakdown service.
However, the RAC is by no means alone in doing this sort of thing. In 2009 Money revealed that the AA was sending out similar demands for a then eye-watering £186. Peter Ludlow from Gelligaer in south Wales, who had been an AA member for 19 years at the time, was later offered cover for £130, but it refused to match the £120 it was charging new customers at the time. Ironically, Ludlow switched to the RAC after using Tesco Clubcard vouchers to reduce his bill to just £49.
A spokesman for the RAC says: “We very much value our long-term members and are sorry to hear [Farrant’s] experience has affected their view of the RAC. We welcome the opportunity to talk to our members if they are unhappy with their renewal offer as we would always far rather they stay with us than cancel their membership.”
Consumers seeking cover have a host of breakdown firms to choose from, with some offering annual cover from as little as £21 a year. A comparison search on Moneysupermarket.com names Rescuemycar.com as the cheapest provider, but the cover is very limited and there is a £40 excess on any claim. This is one area where it is worth spending a bit more for a better policy.
AutoAid is one of the cheaper providers that Money readers should consider. For £43.31 you and a partner are covered to claim while driving any car. Service reports are good, and this is arguably the best option if you are looking for affordable cover.
If you prefer to go with a big name, the AA was named in March by Auto Express as the best provider as rated by readers. But at £159 a year for a couple it is expensive. That price gets you full national recovery and home start. Cheaper packages are available.
GEM Motoring Assist was named as the second-best provider and is offering similar cover for £110 for a couple. The Which?-recommended provider Britannia Rescue was in third place. It is offering full cover for £93 a year – the vehicle is covered for anyone who drives it. The RAC was in fourth place and Green Flag in fifth.
