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Adam Jolley

Car insurance costs rise by £132

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The cost of motoring continues to rise as the latest Confused.com car insurance price index reveals a year-on-year price increase of 18%.

White car on money

Car insurance prices have gone up £132 over the past year – a rise of 18%, with a £66, or 8%, increase seen over the past three months alone. 

This means the average driver now pays £847 per year for his or her premium.

That’s according to the second Confused.com car insurance price index of 2017. 

Further price hikes on the way?

The price index began in 2006 and is published every three months.

The latest rise takes average costs during the period from April to June this year just £11 shy of the £858 high recorded in the second quarter of 2011. 

What’s more, extra pressures currently impacting the insurance industry could push prices even higher – potentially tipping the thousand-pound mark next year, the index suggests.

This includes the Ogden rate cut, which sees insurers paying out more for personal injury claims, as well as June’s increase in insurance premium tax. 

In fact, since the Ogden changes were announced in February, the average cost of car insurance has gone up by £100 in just four months.

Price rises hit younger motorists the hardest

Looking at the data in more depth, it seems younger motorists are bearing the brunt of price increases. 

While 18 year olds are still paying the highest premiums of any other age group (£2,334), it’s 19 year olds who will have noticed the biggest jumps of late. Their costs have soared by an average of £202 (10%) this quarter alone. 

Meanwhile, 21 year olds have experienced the biggest annual monetary increases, with their car insurance ramping up by £315 (21%) since last year.

On the other hand, at £467, people aged 66 enjoy some of the lowest premiums of any aged motorist. They have also experienced the smallest quarterly increase – just 4%, or £20.

Male drivers pay more than females

Despite rules prohibiting insurers from assessing a driver’s risk on their gender, the data shows the gap between what men and women pay for their car insurance stands at £120. 

However, this is linked to the fact that men tend to drive more expensive cars with larger engines, on average, which means they have more expensive claims. And they have significantly more convictions than women too.

Men now typically pay £901 for an annual car insurance policy. This is just £7 off their highest ever premiums, seen in the second quarter of 2011. 

Women are paying £781 on average, which is just £14 less than the £795 high also seen in Q2 2011.

Prices are up across the country

Across the UK, increases can be seen in most areas, with no region escaping an annual price hike. 

In fact, 11 regions – including the East of England, South of England and West of England – are all paying the highest premiums they have ever paid. 

Meanwhile, drivers in the Borders region of Scotland have seen the biggest yearly increase in the cost of car insurance. 

Prices here have risen 27%, or £129, over to past year to take average premiums to £608.

Find out how prices have changed where you live using our car insurance calculator.

Motorists urged to shop around

Amanda Stretton, motoring editor at Confused.com, says: “Car insurance prices are at tipping point. Very soon we expect it’ll be the norm for drivers to be paying the highest prices ever for their premiums.

“We cannot say that we’re shocked by these figures, as following the Ogden rate cut and hike in IPT to 12%, we knew drivers would be taking a hit. Worryingly, there is every possibility that car insurance prices will be the most expensive on record by the end of the year.

“Since April this year, insurers are required to show drivers at renewal what they paid for their car insurance last year. 

“So, being able to compare the amount they paid the year before, and armed with the knowledge that prices are rising across the board, motorists are better equipped than ever to shop around.”

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