Cost of insurance still rising
Premiums rise an average of 14% in 12 months
The average cost of car insurance in the UK has increased by a further £106 (14%) in the past 12 months.
Research reveals that new customers are also seeing even steep rises from their insurer.
New policies, especially for young drivers, are particularly badly affected.
Bang
Drivers shopping around and buying a new policy can now expect to pay £882 for their car insurance, on average.
That’s according to the latest car insurance price index from Confused.com, looking at over six million quotes per quarter.
It’s the most comprehensive car insurance price index for new policies in the UK.
New paint
According to the data, prices have fallen from the highest on record, dropping by £59 (-6%) in the past 3 months.
However, with prices still increasing year-on-year at a higher level, drivers can still expect to pay more now compared to 12 months ago.
It also seems that customers renewing their car insurance with the same insurer could be bearing the brunt of steep increases.
Additional research by Confused.com of 2,000 drivers found that more than 2 in 3 (68%) of those who renewed their car insurance between April and June received a more expensive price.
On average, this was £92 higher than what they paid last year.
But of those with a more expensive renewal, more than a third (37%) went on to use a price comparison site and switch, making savings of around £82, on average.
It shows that despite higher prices, drivers can still save by shopping and switching.
Uneconomical
There’s no denying that car insurance costs are still unaffordable for many drivers.
The latest data shows that drivers aren’t likely to see their car insurance price fall below £1,000 until they reach 38.
But it’s younger drivers who continuously face the toughest changes.
Data shows that 18 year olds are still paying the most for their car insurance.
Average prices are now £2,960, increasing by 23% (£556) in 12 months.
However, 17-year-olds are likely to see the biggest increases overall, as average prices are up 33%—the highest in comparison to any other age group.
This means that average prices are now £2,776, following a £688 increase.
Price of youth
But depending on where they live, this could be even higher for young drivers.
For example, male drivers aged between 17-20 living in inner London could likely be paying the highest in the UK.
Here average prices are £4,480, an increase of 13% (£519) in 12 months.
However, females of the same age group in this area could be paying £3,590, on average, following a 15% (£473) annual increase.
Inner London does tend to be the most expensive region in the UK, and prices are now £1,404, on average, following a 12% (£147) rise.
However, drivers in Central Scotland have likely seen the biggest jumps in the past 12 months. Prices are up 19% (£129), meaning prices are now £820 on average.
Other notable differences are the West Midlands, where prices are the highest outside of London. Here, average prices are now £1,082, following a 15% (£142) increase.
Drivers in the north of England have likely seen big jumps in their car insurance costs, too. Following a 16% (£103) annual increase, prices are now £755.
Geographically challenged
How much drivers pay for their car insurance depends on various factors.
Male drivers generally pay more overall despite insurers being prevented from rating based on gender.
Data shows that the average price for men is now £939, following a 14% (£112) increase compared to this time last year.
For females, prices are up 14% (£96), now £786, on average, a £153 difference between the two.
Costs conspiring
Car insurance continues to rise mainly due to the rising cost of claims.
Cars – whether new or old – are continuing to hold their value for longer, which means repairs on older models remains high.
Parts are also more expensive, especially for newer cars built with more sophisticated and advanced materials or technology.
Combine this with increasing labour costs, and drivers are footing the bill as insurers pass on the price increases through the price of premiums.
Further research found that 2 in 5 (39%) drivers say their car insurance is more expensive than ever.
Another 1 in 3 (29%) say it’s close.
As the cost-of-living crisis continues to affect everyone, around 1 in 5 (22%) say they’re driving less because of the cost of living, while more than 2 in 5 (42%) say insurers need to do more to keep prices lower.
Around 1 in 3 (28%) also think the government needs to be stricter with insurers so that pricing remains affordable.
The Labour government pledged to address this if they won the recent election.
Louise Thomas, car insurance expert at Confused.com, comments:
“But my biggest piece of advice is to never accept your insurer’s renewal quote, without looking elsewhere first. That’s why price comparison sites are a great way to check whether you’re getting the best deal. We’re so sure on this that we offer to beat your renewal. And if we can’t, you’ll get the difference, plus £20(4). Drivers can also benefit from our rewards package, meaning you get more bang for your buck, plus extra perks to enjoy. With a volatile market, making your money stretch further is still really important. So do your research, and reap up the rewards while you’re at it.”