The latest data reveals that the average price of car insurance in the UK has reached a new high, inching closer to £1,000. According to the Confused.com car insurance price index, which is based on over 6 million quotes per quarter, drivers can now expect to pay an average of £995 for their car insurance – a 58% increase of £366 over the last 12 months. While the rate of increase has slowed in the past 3 months, prices are still on the rise and further price hikes may be looming as the UK economy fluctuates and the insurance industry reacts. This could mean that drivers who renew their policies may find themselves paying significantly more for their premiums.
Recent research has shown that renewing customers are increasingly likely to see significant annual price increases, with 75% of those who renewed in the last 3 months reporting a price increase, which is 10% higher than the average increase for those who renewed at any other time last year. Furthermore, renewing customers are quoted £98 more than the previous year, on average, compared to those who shop around, who save an average of £96 by taking out a new policy with a different insurer.
It’s evident from the data that those who opt to shop around rather than renewing their policy could be better off. This can be particularly beneficial for younger drivers who are paying the highest prices and have experienced the biggest increases. For example, drivers between the ages of 17 and 20 have seen premiums rise by more than £1,000, with 17-year-olds experiencing a 98% increase, equivalent to £1,423, on average, bringing the average price of a policy to £2,877. Meanwhile, 18-year-olds have seen an 84% increase, resulting in an average premium of £3,162.
Prices have also significantly increased in different regions across the UK, with Northern Ireland surpassing the £1,000 mark for the first time and London remaining the most expensive region for car insurance. With prices on the rise, it’s a challenging time for drivers and their car insurance, especially as the cost of living crisis continues to impact many. However, there are several strategies drivers can employ to reduce costs when it comes to renewal, such as using a price comparison site, paying for insurance annually, increasing voluntary excess, being accurate with mileage, and enhancing car security.
Despite the recent trend of slowing increases, the car insurance market remains volatile, making it crucial for drivers to shop around and compare policies to ensure they are getting the best price. With inflation playing a key role in the rise of car insurance costs, it’s likely that prices will remain high for some time, as insurers are paying more to cover the cost of claims. Thus, it’s important for drivers to explore all their options to potentially secure a cheaper price. At Confused.com, we offer a guarantee to beat your renewal or pay you the difference, plus £20, providing drivers with an opportunity to not only get the best price but also receive additional cash benefits.