11 November 2021

Don’t Make This Mistake With Your Contract Renewals

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Giulia Tramontana

Martin Temple’s Guide to Renewals

When prioritising letters and emails as reminders to renew a service for another year, many people tend to struggle, either for lack of time or depending on the importance of the service in question. With time limits across both work and home lives, it is understandable for most of us to sometimes letting things slip under the radar to auto-renew.

By being busier than usual, commitments like house insurance may slip by, because even though I am aware of how important it is to have it, I tend to be unsure of its annual cost. It happened to me not too long ago; due to being busy between moving house and job, I waived the car insurance through and carried on with what I had considered to be more important. I thought that the renewal would be close to last year’s premium, due to the fact I had not made any changes or had any accidents. Once I finally noticed the surprising amount on my statement, and called to discuss why the premium had increased, I was simply told I should have checked back on it.

How markets change over time

Believing that your supplier offers the best service around and at a competitive price can sometimes be a mistake. Markets change, offerings change and so can your own circumstances. Consider mobile phone contracts: we used to be charged per text message, then these became included in our monthly bill, now we pay for our data usage in blocks in a similar way. It is interesting to wonder how that will eventually change, but it is a fact that they will; this is a great example of how markets evolve.

Therefore, it is important to be aware of the changes that may apply when it comes to a renewal. Here are some questions to ask yourself:

Does the service you have fit your needs?

Your requirements may have changed over the past year, you may need more or less of this service.

Is the price you are being offered competitive?

Not only should you compare the price with the previous year’s one, but also think about the text analogy – is there a different pricing model that could suit you better, an all-inclusive rate? A multi-year agreement?

Does your service use the right technology?

For example, are you required to access a website in order to use the service, when an app would be quicker and simpler? This is particularly relevant to payments services, where pushing an app notification for a payment is far more efficient than having to remember to login on a website and pay.

Do you need more from the service you are using?

Texts and emails are great, but app notifications may significantly facilitate the usage of the service.

Read about how consistent invoicing helps the process of budgeting

These questions should hopefully help you in the process of finding a new service or renewing the one you are already using, without the risk of regretting an auto-renewal.