Drivers who buy breakdown cover directly from AA or RAC pay up to three times more than necessary, Money Mail can reveal.
Millions of safe drivers shell out around £80 a year (worth up to £1.2 billion in total) for AA or RAC cover to ensure they can access help if their car stops working while they are on the road.
Both companies have a good reputation for customer service and quick breakdown response and have their own fleets of recovery vehicles.
But drivers could cut costs by purchasing additional cover as part of their car insurance rather than purchasing stand-alone policies directly from the AA or RAC.
RAC’s road breakdown cover averages £77 a year, depending on location and vehicle, according to researchers at consumer group Fairer Finance.
Bundle deal: Drivers could cut costs by purchasing additional breakdown cover as part of their car insurance instead of purchasing stand-alone policies
But the same cover is available from £21 when purchased as an add-on to 1st Central car insurance – a saving of 72 per cent.
Even the most expensive additional cost for RAC cover found by Fairer Finance (£36 for Tesco Bank car insurance) would equate to a saving of 53 per cent.
Stand-alone AA road breakdown cover averages £85 a year, according to data from Fairer Finance, but drivers pay just £44.95 if they buy it as an add-on to Admiral car insurance.
Fairer Finance found that of the ten largest motor insurers, four use RAC for their additional cover (Aviva, Hastings Direct, Saga and Tesco Bank) and two subscribe to AA (Admiral and AA Insurance).
LV, the third largest motor insurer, uses its sister company Britannia Rescue for its breakdown cover, while Direct Line and Churchill use its own sister company, Green Flag.
A Fairer Finance spokesperson said: “In essence, by purchasing as an add-on you are purchasing an AA or RAC membership as the cover provided does not differ much from a standard membership, although some levels of cover can be tailored.”
The reason additional breakdown cover costs less is that insurers negotiate hard with AA and RAC to get the best rates for their customers in return for promoting the companies’ services.
In some cases, the add-on may offer coverage that drivers might find more useful than the standalone offering.
For example, 1st Central’s RAC Breakdown will help you if your vehicle runs out of fuel, while RAC’s own policy says that this is the driver’s fault and therefore not covered.
Even with higher levels of cover, drivers can save money by purchasing breakdowns as an add-on.
For example, comprehensive cover in the UK and Europe is three times more expensive when purchased directly from the RAC compared to purchasing from car insurance providers such as Halifax or 1st Central.
Beware of pitfalls, however, as there are disadvantages to purchasing breakdown cover as an add-on.
Peace of mind: Millions of safe drivers shell out around £80 a year (worth up to £1.2 billion in total) for AA or RAC cover to ensure they can access help if their car breaks down.
Firstly, you must be satisfied with the car insurance policy that includes breakdown cover; There is no point in choosing the cheapest breakdown supplement if the insurance does not suit you.
Second, add-on policies tend to be standardized and are more difficult to tailor to your specific needs than stand-alone offerings.
Drivers should always check that an add-on policy offers the level of cover they need, as it may differ from policies purchased outright.
Drivers with supplemental policies can also easily forget that they have the coverage.
Up to 33 per cent of drivers with standalone breakdown cover made a claim in 2022, according to the latest figures from the regulator, the Financial Conduct Authority.
But only 11.65 per cent claimed through their additional breakdown cover in the same period.
Fairer Finance managing director James Daley says: ‘People who buy stand-alone cover have spent more time making the conscious decision to buy that cover and may have shopped around.
‘Whereas buying it along with a car policy is a much more passive experience. Some people may not realize they have purchased it or may forget.
Savings: RAC road breakdown cover averages £77 a year. But the same cover is available from £21 if purchased as an add-on to 1st Central car insurance.
Both ways of buying breakdown cover were equally likely to work out when you needed them: 96 per cent of the time for stand-alone cover and 93 per cent of the time for add-on cover.
Some packaged bank accounts, such as Nationwide’s Flex Plus, also provide breakdown cover along with other benefits (usually travel and device insurance).
These accounts have monthly fees ranging between £10 and £20 per month, meaning that when all the benefits are taken into account, they can be cheaper than buying breakdown cover directly through the AA or RAC.
In some cases, they are even cheaper than purchasing coverage as an add-on to auto insurance.
Lloyds Bank’s Silver Club Lloyds account costs £10 a month (£120 a year) and offers AA family cover in the event of a road breakdown.
This provides you and your eligible family members with coverage in the event of a breakdown in any vehicle, whether you are traveling as the driver or passenger.
Buying this directly from AA would cost £210 and would not include European family travel insurance or mobile phone insurance also offered by the Silver Club Lloyds bank account.
If you bought it as an add-on to an Admiral car insurance policy, it would cost you £90, assuming you buy breakdown cover for two cars.
Nationwide’s Flex Plus account offers breakdown cover in Europe and the UK for a couple and costs £156 a year. It also offers travel and device insurance, as well as perks like no foreign transaction fees.
Buying the equivalent breakdown cover as an add-on would cost almost £200.
The value of packaged checking accounts varies depending on whether you use the benefits that come with them.
Reduced price: AA standalone road breakdown cover averages £85 a year, but drivers pay just £44.95 if purchased as an add-on to Admiral car insurance.
An AA spokesperson said: ‘AA breakdown cover is available through packaged bank accounts, however the level of cover varies depending on the bank account the customer holds.
‘Purchasing coverage directly allows customers to choose their level of coverage, based on their needs.
‘Buying cover directly through AA also gives customers additional benefits not always available through bundled bank accounts, such as 15 per cent off Greene King, up to 30 per cent off Vue, plus discounts on ITV and vehicle service.
“If a customer who currently has AA cover through their bank calls us to purchase directly, or already has direct cover, we will let them know and advise them to choose the cover that best suits their needs.”
The RAC has been contacted for comment.
If you want to purchase breakdown cover as a stand-alone deal, there are cheaper options than AA or RAC. These include smaller rivals such as Green Flag, AutoAid and Britannia Rescue.
None of these companies have their own fleet of recovery vehicles, but instead rely on a network of independent operators.
But the savings can be significant. For example, AutoAid charges from £57 a year for a motorist and her partner for any vehicle they drive.
The cover is also more comprehensive than basic breakdown cover, including assistance if you have car problems at home and compensation if you use the wrong fuel.
However, for cars that are ten years old or older there is a £25 return fee.
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