- While prices are rising, research proves that renewing won’t get you the best deal. More than 2 in 3 (68%) UK drivers received a higher renewal price from their insurer in the past 3 months, of around £92, on average1.
- But shopping around pays off, as those who shopped around saved £82, on average. In fact, shopping around with Confused.com could save drivers as much as £5392
- Younger drivers are still taking the brunt with drivers aged 18 paying the most overall with prices of £2,960, on average, following a 23% (£556) annual increase.
- The West Midlands is the most expensive region outside of London, with average prices now £1,082, following a 15% (£142) increase year-on-year. And drivers in the North of England have seen one of the sharpest increases, with a 16% rise in the past 12 months.
- Despite prices still being high, there are ways drivers can still keep costs down. Louise Thomas, car insurance expert at Confused.com highlights ways in which drivers can get cheaper car insurance and how their money can stretch further.
The average cost of car insurance in the UK has increased by a further £106 (14%) in the past 12 months. And it seems renewing customers are also seeing even steep rises from their insurer, research reveals.
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, 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.
According to the data prices have fallen from the highest on record, having dropped by £59 (-6%) in the past 3 months. However, with prices still increasing year-on-year, drivers can still expect to pay more now compared to 12 months ago.
However, it also seems that customers renewing their car insurance with the same insurer could be bearing the brunt of steep increases. That’s as further research by Confused.com of 2,000 drivers1 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 who had 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 average1. This proves that even though prices were higher than last year, drivers still saved money by shopping and switching instead of renewing.
There’s no denying that the cost of car insurance is still unaffordable for many drivers. In fact, the latest data shows how drivers aren’t likely to see their car insurance price fall under £1,000 until they hit 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. But 17 year olds are likely seeing 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. But this could be even higher for young drivers depending on where they live.
For example, male drivers aged between 17-20 living in inner London could likely be paying the highest in the UK. That’s as average prices are £4,480, which have increased by 13% (£519) in 12 months. And females of the same age group in this area could be paying £3,590, on average, following a 15% (£473) annual increase3.
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. But it’s drivers in Central Scotland who have likely seen the biggest jumps in the past 12 months. That’s as 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. Average prices are now £1,082, following a 15% (£142) increase. And drivers in the north of England have likely seen big jumps in their cost of car insurance too. Following a 16% (£103) annual increase, prices are now £755.
How much drivers pay for their car insurance still very much depends on a variety of factors. But male drivers generally pay more overall, despite insurers being prevented from rating based on gender3. The latest data shows how the average price for men is now £939, following a 14% (£112) increase in comparison to this time last year. And for females, prices are up 14% (£96), now £786, on average. That’s a £153 difference between the two.
But why is car insurance still high, despite some early signs of the market falling? The cost of claims still remains one of the biggest reasons. Cars - whether new or old - are continuing to hold their value for longer. But, this means if a driver makes a claim, then insurers are having to pay out more than they usually would. Parts are also more expensive, especially for newer cars which are built with more sophisticated and advanced materials or technology. Combine this with increasing labour costs, and drivers are footing the bill as costs are put back on them from the insurer in the long term.
It’s clear that the majority of drivers are feeling these cost burdens passed over by the insurance market. Further research also 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. And with many juggling an already tough financial climate, the increasing costs remain challenging. In fact, 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. Something which the Labour government pledged to address if they won the recent election.
Changes won’t happen overnight though, so what can you do to help keep costs down?
- Use a price comparison site - When it comes to keeping costs down, the best thing you can do is compare prices. That way you can ensure you’re getting the best deal to suit your needs and not paying more than you need to. And it’s likely that you can make a saving.
- Pay for your car insurance annually - If you can afford it, pay for your insurance in one go rather than monthly. That's because insurance companies often charge interest for spreading the cost of your cover over the year.
- Increase your voluntary excess - Increasing your voluntary excess can help you get cheaper car insurance. But you need to make sure you can afford to pay it, if you need to claim.
- Be accurate with mileage - Generally, the more miles you drive, the more likely you are to have an accident and make a claim. This means the higher your mileage, the more you pay for your car insurance. So, driving fewer miles chow muchan be a great way to save money on your car insurance policy. But don't assume that a low mileage always means low prices. If you barely drive at all, your insurance company could see that as a risk as well.
- Enhance your car security - The harder it is to steal your car, the less of a risk it is. This usually means cheaper car insurance. There are several ways to improve your car security, including:
- Installing a Thatcham-approved car alarm or immobiliser, if it doesn’t already have one
- Adding secondary levels of security, like a steering lock
- Parking overnight in a secure, well-lit car park, or at home in a garage or driveway, if possible
For more advice on how to reduce costs, visit Confused.com’s guide on how to get cheaper car insurance.
Louise Thomas, car insurance expert at Confused.com comments:
“Car insurance prices have been a huge burden for drivers for some time. And even though they are starting to drop, chances are you will still be paying more now than compared to last year. However, it’s clear that renewing with your current insurer isn’t going to get you the best deal either.
“Whether your car insurance has gone up or down, using a price comparison site to switch and save could result in a cheaper deal. In fact data shows those who shop around with Confused.com could save as much as £5392. But there are also lots of tips and tricks every driver can do to help bring costs down further. Being accurate with mileage and considering a higher voluntary excess, if you can afford to, could help. And although not a financial option for everyone, paying annually for your cover instead of monthly will mean you’re not having to pay interest charges on top.
“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 £204. 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.”
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