The average car insurance bill in Britain has rocketed to almost £1,000, with costs increasing by £284 in the last year.
Eye-watering new figures revealed the surge in car insurance premiums, with average costs having skyrocketed by £403 in the last three years.
In the last year alone, the average cost of car insurance has increased by 43 per cent, from £657 in the first quarter of 2023 to £941 in first quarter of 2024, says comparison site Confused.com.
The staggering figures lay bare the additional costs cash-strapped motorists are facing in addition to other financial pressures from the cost-of-living crisis.
Drivers are becoming increasingly furious over how much they are charged, with an MP earlier this week telling a government committee that her constituents ‘feel that insurance is becoming more of a rip-off’.
The average cost of taking out a new car insurance policy in the UK is now £941, according to the latest index from Confused.com.
Although this figure is actually £54 lower than it was in the fourth quarter of 2023, when average prices reached £995.
Even though prices have dropped slightly compared to the end of last year, drivers are still paying far more now than they were in 2021.
Between January and March 2021, drivers were only paying £538 on average, increasing to £550 for the same period in 2022.
However, after the Covid pandemic cut car insurance premiums for many, due to reduced traffic on the roads reducing claims, average prices began to surge last year. In 2023, they increased from £657 at the start of the year, to £776 in the second quarter, £924 in the third and finally reaching £995 at the end of the year.
The price of car insurance can vary significantly depending on people’s age, driving history, car and location. Insurers are not meant to price by gender but a wide variation remains between average costs for men and women.
Men are now are now paying £1,001 on average for their car insurance compared to women are paying £841 on average, with the gap in price standing at £160.
According to Confused.com this is because men have a higher risk profile than women as they tend to drive ‘more expensive cars with bigger engines and more technology’, leading to a more costly claim if they get into an accident.
The average cost of taking out a new car insurance policy in the UK is now £941, according to the latest car insurance price index from Confused.com (Stock image)
Young drivers hammered for thousands on car cover
Younger people are also likely to be handed a higher insurance premium, according to the data.
Drivers aged 17 are now paying an average £2,919, which is £1,307 more than last year, while 18-year-olds are paying £1,300 more than 12 months ago, with prices increasing from £1,845 in 2023 to £3,145 in 2024.
This compares to current prices for people aged 45, 55 and 65, which are on average £892, £666 and £545, respectively.
Insurance blame increases on inflation, pointing to the price of repairs and labour costs. Cars have also become more expensive to repair due to the requirement to replace entire damaged sections rather than smaller parts.
Prices are also on the rise due to the number of cars being driven on the road having increased since the Covid-19 pandemic, meaning that there are greater risks of collisions with other vehicles.
Because the price is going up, it’s harder to make a claim; people, when they do make a claim, often have to wait a very long time or aren’t dealt with very fairly
Dame Angela Eagle
Critics have argued that car insurance prices have risen more than they need to, however. The monumental rise in the cost of car insurance has led to some motorists to voicing their anger at such price hikes to their local MP.
Treasury Committee member Dame Angela Eagle appeared at a hearing into insurance earlier this week and explained the frustrations of her constituents.
She said: ‘My constituents and many people who write to the committee feel that insurance is becoming more of a rip-off.
‘Because the price is going up, it’s harder to make a claim; people, when they do make a claim, often have to wait a very long time or aren’t dealt with very fairly.
‘And that’s particularly the case for insurance that’s compulsory, such as driving insurance.’
An aerial view of rows of newly built cars and vehicles ready for export and import and delivery to sales dealerships in Tamworth, UK
She asked David Mendes da Costa, principal policy manager at Citizens Advice, if that is the kind of approach the charity sees.
He said: ‘I think the people who come to us for support… they are offered the price that they are offered and have no idea what’s sitting behind it.
‘And often they’re not going to be aware of the fact that, on the basis of where they live and their postcode, for example, they might be being charged a lot more than someone who could even be just across the road from them or a few streets down.
‘There isn’t the transparency, and I think that lack of transparency is probably what drives the low levels of trust that we see in the sector.’
Mr Mendes da Costa told the hearing that the charity is seeing a ‘clear rise’ in people asking for help who are unable to afford their insurance.
He said: ‘To be clear, insurance really is an essential, especially when it comes to car insurance, at least. People need it to drive and people need to be able to drive in order to look for work, in order to get to work, in order to make hospital appointments or run their kids to school.’
