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Top postcodes for the cheapest car insurance

Model car on coin pilesCar insurance premiums have been rocketing over the past few months, but some motorists have not suffered quite as much as others.

Figures from the Car Insurance Price Index highlight how hard younger drivers and those living in the UK’s busiest areas have been hit by soaring costs. (See: The big debate: Why are car insurance premiums soaring?)

Young driver car insurance has risen the most, with a man aged between 17 and 20 now paying on average almost £2,900 a year for comprehensive cover (women in this age group are considered less risky, so are charged just over £1,600 – which is still incredibly expensive).

Premiums for 17 to 20-year-olds are up 42 per cent in the past year, while costs for those in their 30s, or drivers over 60 have increased by less than a third. (Drivers aged between 40 and 60 have seen larger rises, due to the fact that many of them insure “risky” young adult children as named drivers.)

And in many parts of cities such as London and Manchester, the cost of cover has gone up by more than half in the past 12 months. In certain areas of the capital, for example, average annual costs for drivers in all age groups are well over £1,000.

The areas with the lowest premiums

But it’s not all doom and gloom: some parts of the UK have escaped the worst of this year’s motor insurance price hikes, while others have historically benefited from lower-than-average premiums.

On average, comprehensive policies have risen 37.5 per cent in the past year, and the typical premium is now £650.

So where have rises been lower, and in which areas can you expect to pay less for motor insurance?

The short answer is Scotland: here, price increases over the last year have largely remained less than 30 per cent, and the typical policy costs little more than £500.

Inverness, for example, has seen premiums rise by 28 per cent since September 2009 to the current level of £457.

In Edinburgh, the cost of insurance has gone up by 24.7 per cent to £498.

The Scottish Borders are the region with the lowest average annual premiums in the UK, at £479.

Outside Scotland, the South-west of England is also relatively cheap: here, average premiums are £485, up 30.3 per cent on last year.

In Truro, Cornwall, for example, the average policy costs £447 (26 per cent more than last year).

Parts of eastern England are also relatively inexpensive: Lincoln and Norwich have both seen increases of around 30 per cent, to £478 and £476 respectively.

What are policy costs based on?

Insurers base premiums on the likelihood of them having to pay out, and the expense of meeting claims.

So if you live in an area which has a high vehicle-theft rate, an above-average number of accidents, and more valuable cars, you are likely to face higher premiums – other things being equal.

As you can see from the statistics above, it is less densely populated areas that prove less expensive for insurers and therefore for their customers. 


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Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris

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