The typical car insurance premium has accelerated 12.4 per cent in a year as the cost of living crisis continues to batter motorists.
Car cover costs have risen £76 annually in the first two weeks of February, according to Compare The Market, meaning the average motor premium now stands at £689.
While inflation reached 5.5 per cent in January, frequent motorists will likely be feeling that they are enduring very much the worst of it.
With premiums rising, the data suggests that switching to another provider will save drivers more money than last year – typically at £119 compared to £94 last February.
The cheapest premium typically available has also risen by £51 year-on-year. However, this still means that drivers could save an average of £119 by shopping around for a cheaper deal.
Petrol and diesel prices have risen by 22 per cent in the past 12 months, according to the RAC to record highs.
Meanwhile, the price of used cars has also soared over the past year by an average of 30 per cent thanks to huge delays for those tempted by a brand new motor.
Alex Hasty, director at Compare The Market said: ‘Motorists will be concerned that the cost of car insurance has jumped from last year.
‘Our figures show drivers will now have to pay an average of £76 more for their policy.
‘This increase will put yet more financial pressure on many households whose budgets are being squeezed by the cost of living crisis with rising inflation, surging energy costs, and higher petrol prices.’
| Month | Average premium | Average cheapest premium | Saving by switching |
|---|---|---|---|
| Feb 2022 | £689 | £570 | £119 |
| Feb 2021 | £613 | £519 | £94 |
However, with the cheapest premium typically available costing £570, drivers can still save £119 on average by switching, according to the comparison site.
Switching car insurance appears to be something that many motorists are not in the habit of doing.
As many as 17million drivers let their car insurance auto-renew last year at a cost of £830million, according to MoneySupermarket.
It found 52 per cent of drivers let their car insurance renew automatically in 2021, resulting in an average price increase of £49 a year.
Recent changes to renewal notification rules, mandated by the FCA and intended to ensure providers clearly communicate differences between old and new premium prices, went unnoticed by nearly half of drivers.
‘For any drivers who are worried about this upswing in car insurance prices, we recommend shopping around for a cheaper deal ahead of your renewal,’ said Hasty.
‘Motorists could typically save more than £100 by switching to one of the cheapest insurance providers which could offset the increase in premium costs or be put towards fun things like a cinema trip and a meal out with friends and family.’
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