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Has car insurance gone up 2022?

The cost of car insurance went down by 6% over the past 12 months. The average cost of a comprehensive car insurance policy is now £539 - the lowest its been for six years. That's according to our car insurance price index, powered by Willis Towers Watson.

But the research also shows a quarterly increase in the cost of car insurance - the first time in 12 months. Prices are 5% (£25) higher in December 2021 than they were three months previously.

Have car insurance costs gone up in 2022?

Car insurance prices saw a steady fall in each quarter in 2021, possibly as a result of shifting driving habits during the Covid-19 pandemic. With more people working from home and fewer commuters, it stands to reason that there might be fewer accidents.

In fact, our research shows that drivers reported cutting their annual mileage by more than 40% during the 2020 lockdown**.

And police forces across the UK reported a 26% drop in the number of road accidents they attended.+

But as things start to go back to a state somewhat resembling normality, there's an increase in road traffic, meaning an increase in claims. And this is reflected in how much drivers pay for their car insurance. During the last three months of 2021, drivers paid 5% (£25) more than the previous quarter.

This is the steepest price increase in four years. And if this price rise continues, it's predicted that the average cost of car insurance could rise to as much as £566 by March 2022. This puts the cost of car insurance at pre-pandemic levels.

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

Car insurance costs started to creep up during 2019 and 2020. But then the nationwide shift in driving habits helped to keep prices in check. Now, motorists are enjoying some of the lowest insurance prices since 2016.

Period Average car insurance cost
Q4 2017
Q4 2018
Q4 2019
Q4 2020 £575
 Q4 2021 £539

Insurance ‘loyalty penalty’ scrapped but customers could still save

On 1 January 2022, the Financial Conduct Authority (FCA) stopped insurance companies hiking up prices for loyal customers.

Before this, insurance companies would often give discounted premiums to new customers, which usually meant that loyal customers saw higher prices to compensate for this.

Now, insurers can't penalise existing customers in this way. But that doesn't mean that you're guaranteed to get a cheaper policy. In fact, our research found that two in five (42%) drivers who had their renewals last quarter saw their prices go up by £45, on average.

This is why it's still worth shopping around. Even if your renewal is less than you thought, or is slightly less than the previous year, there are still savings to be made.

These figures see car insurance drops across the UK. But some people might still find that their car insurance costs have actually gone up. This could be for a number of reasons. For more information, check out our guide on why your car insurance might have gone up.

And if you're looking for ways to save even more, check out our tips for cheaper car insurance.

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Male drivers pay more than women

Female drivers saw their prices rise slightly less than men. Their car insurance costs were 5% (£22) more than last quarter. They're paying £478, on average.

Male drivers also saw an increase of 5% compared to last quarter, but this equates to a rise of £27. They're currently still paying more than women for their insurance, at £576, on average. 

Male drivers 'riskier' to insurers

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

For example, male drivers tend to drive more expensive cars, with bigger engines and/or newer technology. 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. 

Lowest price on record for 17-year-olds in 2022

It's widely known that younger drivers tend to have much higher insurance costs than older, experiences drivers. Drivers aged 18, for example, paid £1,407 for their policies - almost triple the national average.

But 17-year-old drivers are actually enjoying the lowest prices on record for their age group. They're paying £1,206, on average, which is lower than the more experienced 21-year-olds who pad £1,268 for their policies.

This could be due in part to the pandemic impacting driving tests for months at a time. With fewer new young drivers on the road, there's a decreased risk of accidents involving 17-year-olds. This in turn could reduce the average car insurance price for that age group.

Other motoring costs on the rise

In addition to this quarterly rise in the cost of car insurance, other motoring costs are also on the rise.

According to our fuel price index, fuel prices have been on the up since February last year. Petrol costs £1.45 per litre, and diesel costs £1.49, on average (prices correct as of January  2022). This is an increase of 25p per litre for both petrol and diesel.

You can check petrol prices in your local area and see if you can get cheaper fuel elsewhere. And there are ways you can improve your fuel economy too.

For more tips, check out our guide on how to save money on your motor.

New rules 'make the market more competitive'

Louise O’Shea, Confused.com CEO, says:

"Car insurance prices rising is not the happy news we wanted to start the year with. However, it’s also not completely unexpected, as people resume their normal driving habits, and the cost of vehicle repair and replacement continues to increase.

“As claims costs continue to increase, we expect to see car insurance prices rise too, regardless of the change in pricing regulations by the FCA. It’s really important that we remember the new rules set out by the FCA don't mean our renewal price will be the best price we can get.

"If anything, these changes have made the market even more competitive, so there's likely an insurer out there that could be cheaper or offer a better deal for the cover you need."

* How did we get these figures?