The latest data from Confused.com shows that car insurance is heading towards a grand a year for the average driver. Unsustainable in the medium term, expect more uninsured drivers, fronting, false address info, dubious occupation details etc. Here’s the word;
Drivers are continuing to pay more for their car insurance as prices accelerate by £284 (43%) in 12 months, new data reveals.
The average cost of taking out a new car insurance policy in the UK is now £941, as prices continue to increase at a rapid pace. That’s according to the latest car insurance price index from Confused.com, powered by WTW. Based on more than 6 million quotes per quarter, it’s the most comprehensive car insurance price index for new policies in the UK.
However, while prices are higher for those shopping around annually for their car insurance, the data shows that the cost of car insurance dipped slightly at the beginning of the year. This is as prices fell by £54 (-5%) between January and March this year, offering some drivers some respite from significant increases. But even though prices have dropped compared to the end of last year, drivers are still paying more now than they were at their last point of renewal.
TIME TRAVELLERS
In fact, in some cases, drivers are paying significantly more now than they were at a younger age. This is because car insurance prices spiked last year as the insurance industry recovered from the turbulence of COVID-19. For example, a 22-year-old driver is now paying £667 more than they possibly were 5 years ago.
Today, a 22-year-old can expect to pay £1,930 for their car insurance. But in comparison, 5 years ago, a 17-year-old was paying £1,263, on average. This is true for all age groups. In some cases, they’re now paying hundreds of pounds more than they would’ve at their age 5 years ago. Even though they may have gained more driving experience and built a no claims bonus.
And it seems that most drivers are recognising the impact on the steep increases over the past year. Further research by Confused.com found that more than 2 in 5 (43%) UK drivers claim they are paying more for their insurance now than ever before. And only 1 in 7 (15%) claim they are happy with the amount they pay for their car insurance.
DESPITE THAT FCA HOO-HA, IT STILL PAYS TO SHOP AROUND
Despite their loyalty, renewing customers are also seeing their prices increase significantly. But some were able to save money by shopping around. According to the research, of those who received their renewal between January and March this year, 3 in 4 (75%) received a more expensive price compared to the previous year. According to the research, these drivers saw their renewal price increase by £94, on average. After receiving their price, almost half (45%) went on to shop around and switch insurers, saving £90 compared to last year’s price, on average.
This shows that even while premiums are still high, drivers could save money by switching to another insurer, rather than sticking with their renewal.
REGIONAL DIFFERENCES
How much a driver is paying for their insurance very much depends on where they live, or how old they are. For example, men are now paying £1,001 for their car insurance, on average. While this is a £60 (-6%) drop in the average price compared to 3 months ago, this is still £299 (43%) more expensive than premiums for male drivers 12 months ago. In comparison, female drivers are paying £841 for their insurance – a £258 (44%) increase year-on-year. This has, however, dropped by £43 (-5%) in the past 3 months.
Similarly, prices can vary in different regions across the UK, with some paying significantly more than others. Motorists in Inner London can now expect to pay £1,501 for their car insurance, on average. While this has dropped by £106 (-7%) in 3 months, drivers buying their car insurance in the last quarter are still paying £434 (41%) more than 12 months ago.
Prices in Northern Ireland have dropped the most over the past quarter, with premiums now 8% (£83) lower than 3 months ago. This means drivers in the region are now paying £968, on average. However, this is still £264 (38%) more expensive than 12 months ago.
AGE RELATED RISES
Some age groups are also paying out more for their insurance, with younger drivers typically bearing the brunt of expensive premiums. For example, 18-year-olds are now paying £3,145 for their car insurance, which is an increase of a staggering £1,300 (70%) in the past 12 months. For drivers of this age, prices only dropped by £17 (-1%) in the past 3 months, which is significantly lower than the average decrease in the UK.
While prices dropped for most, the price for 17-year-olds is the only age group to have increased this last quarter. Motorists of this age are now paying £2,919, on average, for their car insurance. This is £1,307 (81%) more expensive year-on-year, and £42 (+1%) higher than 3 months ago. This is the most expensive price recorded for this age group.
Meanwhile prices for 28-year-olds fell the most over the past 3 months, with premiums now 9% (-£139) cheaper, on average. This brings the average premium for drivers of this age to £1,353. However, this is still £403 (42%) more expensive year-on-year.
Even with prices seemingly starting to drop, drivers are still paying over the odds for their premiums. But why are prices still so high? Inflation has played a key role in the rise of car insurance costs, due to the impact on the cost of repairs and claims.
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