Has car insurance gone up in 2024?

The cost of car insurance has indeed increased over the past year. Our latest numbers show that the national premium is now £882. 

This is still 14% higher than last year, equivalent to an additional £106. But in the last quarter, prices have actually fallen by 6%, or £59. Putting an end to the record-high prices observed in late 2023.

Now is a good time to consider comparing prices to ensure you're not paying over the odds.

Have car insurance costs gone up?

Despite some recent fluctuations, car insurance costs have risen over the past year. The average cost of a comprehensive car insurance policy is now £882, reflecting a 14% increase compared to last year. This means that some drivers are still paying more now than they did five 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. Those who got their renewal between April and June 2024 faced higher prices compared to the previous year, with an average increase of £114.

Even if your renewal isn't as high as expected, or is only slightly less than the previous year, you could still save money by comparing quotes.

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.

In Central Scotland, premiums have jumped by 19%, an increase of £129 year-on-year, bringing the average cost to £820. Meanwhile, in Manchester and Merseyside, drivers are facing a 10% rise, adding £99 to their annual bill, with an average premium now at £1,064.

Shopping around could help you find a better deal, especially in these regions where prices have spiked.

Male drivers pay more than women

Car insurance costs have changed for both genders, but men still pay more. Male drivers now pay an average premium of £939, up 13% (£112) from last year. Female drivers, on the other hand, pay £786, a 14% increase (£96) year-on-year.

The EU Gender Directive means insurers can't set prices based on gender. However, other risk factors come into play. Men often drive more expensive cars, which leads to higher claims. They also tend to have more motoring convictions.

These factors contribute to the £153 gap in car insurance costs between men and women. Shopping around can help you find a better deal, regardless of gender.

Younger drivers hardest hit

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

An 18-year-old driver pays an average of £2,960, a 23% increase (£556) from last year. 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 Q2 2024 research, car insurance costs tend to dip below the £1,000 mark once drivers reach the age of 38, with the average premium at £968. 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