Car Insurance Costs Are Stressing Out Drivers

A new report from Forbes Advisor reveals the financial stress faced by motorists when it comes to car insurance.

Four in five (83%) British adults are drivers who have either purchased car insurance or had it purchased for them within the last 12 months. More than half of this group (55%) said car insurance is excessively expensive. This sentiment was even more pronounced among younger drivers, with more than two out of three individuals aged 18 to 34 (67%) sharing the same view. As the under 25 year old segment carries a high risk of incidents, it’s no surprise that inflation has hit harder amongst this younger age group.

LEGAL REQUIREMENT

Despite research findings indicating that the majority find cover overpriced, car insurance is a vital cost many are willing to prioritise: nine in ten Brits (90%) have comprehensive policies, the most expensive cover available. Notably, among those aged 55+, this figure increases to a greater amount (98%). However, this percentage drops significantly to just over seven in 10 (72%) among the 18 to 34 age group, where premiums tend to be higher for less experienced drivers.

The survey also highlights that almost half (47%) of drivers switched insurance providers in the past year, with the most common reason for doing so being to save money (38%). To achieve this, one-fifth of respondents (21%) opted for cheaper providers, while others turned to paying through monthly instalments to avoid a hefty lump sum payment (17%), even though instalments are more expensive because interest is charged by the insurer (in the majority of cases).

CANCEL THE ADD-ONS

Drivers are also finding ways to save money by making changes to what is covered by their policy. A notable 8% have opted out both including breakdown cover, with the same number choosing to increase their voluntary excess. This price increases to one in six (15%) for drivers aged 18 to 34.

Further findings reveal that the most popular channel for buying car insurance price comparison websites, accounting for 40% of motorists. Other options included buying directly from insurance company websites (15%) or over the phone with an insurance provider (13%). Over one fifth of drivers (22%) simply renewed their previous insurance policies without seeking alternative quotes.

To afford their annual premiums and avoid costly monthly instalment plans, nearly one-fifth (18%) of Brits have dipped into their savings. Additional financing methods included utilising interest-free credit cards, by more than one in 20 Brits (6%), as well as loans from friends or family (5%).

Kevin Pratt, car insurance spokesperson at Forbes Advisor, says: “Car insurance is a necessity for many individuals and families, and the escalating costs are placing an increasing strain on households already struggling to make ends meet. While saving money is important, it’s crucial not to compromise on the cover you need.

“Striking a balance between cost savings and adequate protection ensures you’re financially secure in case of an accident. It’s worthwhile  exploring different options, comparing quotes, and making informed decisions that prioritise both savings and quality cover.”