Has car insurance gone up in 2024?

The cost of car insurance has increased by 43% over the past 12 months. The average cost of a comprehensive car insurance policy is now £941 - an increase of £284 over last year. That's according to our car insurance price index, powered by WTW.

But why have these costs gone up, and who's been hit hardest? Let's take a look.

Have car insurance costs gone up?

Car insurance costs have increased over time, but the average price has dipped by 5% compared to the fourth quarter of 2023 (October-December). This is the first time prices have fallen in 2 and a half years, after reaching record highs at the end of 2023.

Despite this, our research also shows car insurance is 43% more expensive than it was 12 months ago. The average cost of a car insurance policy in the UK is now £941. This means some are still paying more now than they were 5 years ago.

Why has car insurance gone up?

There are several reasons why car insurance prices have gone up so much recently.

First, there are more cars on the road than there were before the pandemic. And more cars mean more accidents, and more accidents mean more claims. This all adds to the costs that insurers pay.

The cost of parts and labour have increased due to inflation, this means it's costing insurers more to pay to repair or replace vehicles. It's also more complicated to repair cars now, as many of them use expensive technology and equipment.

It's still worth shopping around. Of those who received their renewal between January and March 2024, 3 in 4 (75%) had a more expensive price compared to the previous year. These drivers saw their renewal price increase by £94, on average.

After receiving their price, almost half (45%) went on to shop around and switch insurers, saving £90 compared to last year’s price, on average.

So even if your renewal isn't as high as you thought it might be, or is only slightly less than the previous year, you could still save money.

How have car insurance prices changed over the past few years?

Car insurance costs started to rise during 2019. But then the nationwide shift in driving habits during the pandemic helped to keep prices in check. The return to normality, coupled with the cost of living crisis, has seen car insurance costs rise again.

Price rises seen across the UK

Car insurance prices have risen across the UK. But some areas have fared worse than others.

Drivers in Inner London, for example, paid £1,501 for their car insurance. While this has dropped by £106 (-7%) in 3 months, drivers buying their car insurance in the last quarter are still paying £434 (41%) more than 12 months ago.

Prices in Northern Ireland have dropped the most over the past quarter, with premiums now 8% (£83) lower than 3 months ago. This means drivers in the region are now paying £968, on average.

Male drivers pay more than women

Both female and male drivers experienced a 5% and 6% drop in prices respectively in Q1 2024 compared to Q4 2023. But this is still £299 (43%) more expensive for male drivers and £258 (44%) more costly for female drivers than 12 months ago.

Despite the change, men are still paying more for their insurance than women. On average, male drivers paid £1,001 for their car insurance whereas female drivers paid £841.

The EU Gender Directive means insurers can't work out insurance prices based on whether a driver identifies as male or female. But there are other risk factors that mean men could have higher car insurance costs.

For example, male drivers tend to drive more expensive cars. This usually makes for higher-value claims in the event of an accident. Male drivers also tend to have more motoring convictions than female drivers.

This could explain the £160 gap in car insurance costs between men and women.

Younger drivers hardest hit

It's widely known that young drivers tend to have much higher insurance costs than older, experienced drivers.

Drivers aged 18, for example, paid £3,145 for their policy, on average - more than triple the national average. It's also £1,300 (70%) more than a year ago. This is the most expensive age for car insurance.

When will the cost of car insurance go down?

You might think that your car insurance costs plummet once you hit 25 years of age. This isn't always the case. In fact, in recent years, the reality is drifting further away from this idea.

According to our Q1 2024 research, car insurance costs tend to dip below the £1,000 mark once drivers reach the age of 41. This is a slight change as Q4 2023 showed prices fell below £1,000 at the age of 43.

But if you're a younger driver, you don't need to wait around for your car insurance costs to go down. Here's how you can cut the cost your car insurance:

• Shop around every year for a better car insurance deal
• Pay annually for your insurance, if you can
• Increase your voluntary excess
• Build up a no-claims bonus

For more tips, take a look at our guide on how to get cheaper car insurance.

Other costs still high

Drivers will be pleased to know that fuel is one of the few costs that are coming down. But, including fuel, the cost of driving is still increasing. According to our fuel price index, fuel prices rose between August 2021 and July 2022 before starting to come down again. Petrol now costs £1.48 per litre, and diesel costs £1.57, on average (prices correct as of 11 April 2024).

What our motor insurance expert says

“For the first time in a while car insurance prices are starting to drop, and this may come as a relief. Especially as most drivers have seen increases of hundreds of pounds over the past 12 months. However, prices are still incredibly high and so people can expect to see their price increase compared to the previous year.

“The important thing to remember is that you don’t have to accept your renewal, especially as we know from our research that shopping around can find you a cheaper price. And on top of this, there are ways you can save as well. Choosing a higher voluntary excess can bring down your overall premium - but remember to only choose a price you can afford should you need to make a claim. And if you can, paying annually will save you money too, as monthly payments can incur an interest charge."

Louise Thomas Motor insurance expert