Car insurance premiums for the over-50s have jumped by an average of 54% in the past year, causing yet more financial pain for consumers who are already struggling to cover other steep living costs.
According to research by price comparison site Compare the Market, the average cost of the most competitive car insurance policy for the over-50s has soared by around 54% in the past year, with typical annual costs now at around £429.
Since data was first collected in October 2013, premiums for this age group have rocketed by more than 80%, according to the motor insurance price index by Consumer Intelligence.
The significant rise in the cost of car insurance may be partly due to a rise in the cost of claims for insurers, Compare the Market said. The rapid rise in inflation will have likely impacted many areas of the motor repair industry including the cost of spare parts, energy, and hiring specialist mechanics.
New rules introduced by the Financial Conduct Authority’s in January 2022 that ban insurers from offering different premiums to new and existing customers may also have ramped up prices. Some car insurance companies are finding loopholes that allow them to charge returning customers more than new ones for the same policy. Read more in our article Car insurance: why loyalty still doesn’t pay.
Julie Daniels, motor insurance expert at Compare the Market, said: “The rising cost of car insurance is understandably causing concern for many motorists, with our research showing motor premiums have increased by 49% year-on-year. For all drivers, shopping around ahead of renewal is one of the best ways to save money on car insurance. We want to encourage motorists over 55, who have typically tended more to stick with their existing insurance provider each year, to compare prices to find the right deal. It’s also important for people to consider if they’re able to encourage or support friends and family members to look for savings online.”
Drivers in London pay the most for cover, the research revealed, whereas drivers in the South West pay the lowest premiums. Prices are rising fastest in the West Midlands and London at 53% and 51% respectively while Northern Ireland saw the lowest price rises at 35%.
How to reduce your over-50s car insurance premiums
If you’re worried about soaring car insurance premiums, it’s well worth shopping around for cover, even if your policy isn’t up for renewal yet. According to Confused.com, getting a quote between 21 and 30 days before your policy expires is usually the best idea, as you’ll pay much more if you leave it until the last minute. Find out more in our article When is the best time to renew car insurance?
There’s a good chance you might be able to reduce your car insurance premiums if you think you’re paying over the odds.
For example, believe it or not, the way you describe your job when you apply for car insurance can have a big impact on the amount you pay. Don’t be tempted to put down a different occupation to the one you actually do, as this could invalidate your cover, but when you next apply for cover it could be worth seeing if describing your job in a different way reduces your insurance premiums.
Paying for your cover up front rather than in monthly instalments can also save you money, so if you can afford to do this, it’s worth checking how much it could save you.
Read more about the different ways you can reduce costs in our articles 10 practical tips to reduce your car insurance premiums, and 16 cheapest cars to insure.
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