Drivers can expect to pay £776 on average for their annual car insurance policy according to a new report, a record high, making it more important than ever to shop around when your policy is up for renewal.
This figure, from the most recent car insurance price index from Confused.com, is around £119 (18%) more than the average cost just three months ago and 40% (£222) higher than a year ago. This makes it the highest average recorded since the site began keeping track of car insurance premiums in 2006.
The increase is partly attributed to Financial Conduct Authority (FCA) regulations introduced in January 2022 that prevent insurers from overpricing returning customers and oblige them to offer renewal at the same cost as an equivalent brand new policy. Insurers adjusted their prices in response, but this resulted in them generally hiking them across the board rather than reducing them.
Compare cheap car insurance quotes
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £490* per year.
*51% of consumers could save £490.26 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next four cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from June 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
Diving into different demographics, the study found a considerable difference between the amount paid by men and women, with men paying £827 on average (£236 more than last year) and women paying £690 (£198 more). This means the “gender gap” between male and female drivers has widened from £119 to £137 since the beginning of this year.
The 2012 EU Gender Directive means insurance companies aren’t allowed to factor in someone’s gender when calculating their premiums, but men are still landed with higher insurance costs on average due to typically having higher “risk profiles” than women. For example, men tend to drive more expensive cars, so their insurance claims tend to be higher when they get into accidents.
From an age-based perspective, the report found that drivers around retirement age are the best off, with the lowest cost premiums of all age groups. Drivers aged 69 pay just £413 for car insurance on average – that’s over £300 less than the average for all age groups, but still represents a 32% (£101) increase for the demographic over the last 12 months.
Prices also varied considerably across different parts of the UK, with the average driver in Inner London paying an eye-watering £1,257 a year and their Outer London counterparts forking out £1,003 annually.
In fact, the only regions in the UK not paying their most expensive recorded price are Manchester and Merseyside, who suffered from higher prices back in 2011 – but drivers in these areas are still paying the highest costs outside of London, at £965 a year on average.
With costs at such astronomical highs, it’s more important than ever to learn how you can keep your premiums down.
How to keep your car insurance premiums down
The best way to start cutting down on your insurance costs is to compare quotes from a variety of providers and find out which ones offer the best deals. The report from Confused.com found that drivers who switched their insurance using a price comparison site saved £63 on their policy on average.
Never automatically renew with the provider you’re currently using, especially if you’ve recently turned 50 – it’s likely that there will be better deals available to you now.
You can use this tool to get started and compare car insurance quotes for people over 50 from over 110 providers.
Even once you’ve settled on a particular policy, there are a few handy ways of cutting your costs, such as paying your premiums annually, keeping your car secure, and changing the way you describe your occupation. Read more in our article 10 practical tips to reduce your car insurance premiums.
Or, for more tips on keeping travel costs down in general, check out our articles 11 ways to keep fuel costs down and 12 ways to save on car and travel costs.
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