Record High Premiums
- Motorists in the UK are now facing average car insurance costs of £1,000, which is the highest price ever recorded. This information is based on the latest data from Compare the Market.
Year-on-Year Increase
- Premiums have surged by an average of £366, representing a 52% year-on-year increase. As a result, the typical price for car insurance now stands at £995.
Impact on Young Drivers
- Young drivers have been hit particularly hard, with their premiums rising by £655 in the past 12 months, reaching an average of £2,002.
- Young drivers aged seventeen have experienced even more significant increases, with premiums rising by 98%, equivalent to an average of £1,423, resulting in an average policy price of £2,877. Eighteen-year-olds face an 84% increase, paying over £3,000 for the first time, with average premiums reaching £3,162.
Factors Contributing to Rising Costs
- The substantial rise in car insurance costs may be partly due to increased claims expenses for insurers.
- Factors such as high inflation rates impacting motor repair costs (including spare parts, energy, and specialist mechanics) have played a role.
- Additionally, record payouts for claims in the third quarter of 2023 and damage caused by Storm Babet, especially in Scotland and the East Midlands, have further contributed to the premium increases.
Regional Variations
- London remains the most expensive region in the UK for car insurance. Drivers in Inner London pay an average of £1,607, while those in Outer London pay £1,291.
- Other parts of the UK are also experiencing steep rises. For instance:
- Northern Ireland: Premiums have surpassed the £1,000 mark for the first time, with a 57% increase in the past 12 months, resulting in an average premium of £1,051.
- Central Scotland: Drivers have seen a 64% increase (£350), doubling their insurance premiums in two years. The average driver in central Scotland now pays £897.
- Advice for Drivers: Louise Thomas from Confused.com suggests that drivers review their policies to explore ways to save, especially given the ongoing cost of living crisis. Shopping around for better insurance deals can be beneficial, particularly for younger drivers who are paying the highest prices.
