The brand has dropped Dave, the dancer in the "Epic dance off" and "Epic squad" spots, and introduced the baddie strutting down the high street to Irene Cara’s Fame.
The ad by Mother shows Skeletor attracting several followers as he dances, including a schoolboy sidekick who lets off a bolt of mystic power.
Nemesis He-Man, who has been stocking up on bananas, saw the events unfold and when the pair bump into him, he declares: "Skeletor, you’re so Moneysupermarket."
Moneysupermarket.com said the ad "demonstrates that even the most eternally disappointed individuals can still feel epic by saving money on their car insurance".
The 60-second TV ad launches on Saturday 25 March and will include digital and social media with the hashtag #Epicskeletor.
The ad was directed by Fredrik Bond through Sonny.
Darren Bentley, marketing director at Moneysupermarket.com, said: "We wanted to bring a fresh new perspective to our ‘You’re so Moneysupermarket’ campaign this year.
"We thought it would be fun to subvert expectations of one of the best-known super villains from our childhoods and show that, no matter who you are, you’re bound to feel epic if you save money on your household bills."