Martin Lewis asked a panel of guests whether they needed car insurance for owning or driving a vehicle with audience members in agreement it was only needed to drive a car. However, the money expert revealed the audience were incorrect as he revealed car insurance was needed at all times.
Speaking on ITV’s Martin Lewis Money Show, he said: “These days you have to have insurance if you have a car.
“The only time you don’t need that is if you’ve got what’s called a SORN, a statutory off-road notification, which means you’re never going to drive [your car].
“They did that because of uninsured drivers not being on a database. Now you’re on a database, which means we now live in this auto-renew world.
“This world where insurance companies will auto-renew you and they do that so you have continuous cover so you’re not breaking the law.”
The money expert revealed this was one of the drawbacks of the system as motorists are effectively enrolled into their same policy year-after-year often without warning.
Loyal customers could see their prices increase as a result of auto-renewal schemes as car insurance providers offer their best prices to new customers.
He later described auto-renewal as a ”sin” and revealed the secret to making car insurance savings was to shop around for new agreements 21 days before an agreement was due to expire.
From June 2011 all motorists needed to have car insurance even if they were not planning on using their car.
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Continuous Insurance Enforcement (CIE) legislation was introduced in a desperate bid to reduce the number of uninsured motorists on the road.
CIE rules allow Motor Insurance Bureau (MIB) and the DVLA to work together in identifying uninsured vehicles.
This is done by comparing vehicle records held by the DVLA against those on the MIB database to spot discrepancies.
Any owners of a vehicle who do not have insurance cover will be sent an advisory letter warning them fines could be issued.
Vehicle’s registered as SORN are only allowed on the roads if they are driving to a pre-booked MOT test or garage service or police could issue fines for not holding valid insurance.
Data from the RAC reveals the changes to CIE may have worked in reducing offences as then number of people caught driving without insurance continues to fall.
Just 79,713 motorists were caught without any car insurance cover in 2018 in the lowest figures seen since 2012 in a 27 percent drop.
RAC Insurance director Mike Godfrey said: “From 2012 to 2015 there was a steady downward trend in the number of ‘driving without insurance’ offences, but there was then an increase in 2016 followed by a six-year high in 2017 which appears to be directly linked to the increase in the price of insurance at that time.
“The introduction of Continuous Insurance Enforcement in 2011 more than likely explains the reduction seen in the following four years, but we believe the increases in 2016 and 2017 are related to a rise in the average cost of insurance.”