With the latest Confused.com car insurance price index revealing a year-on-year price increase of 14%, prices are likely to reach a record high before the year’s out.
Car insurance prices have gone up £101 over the past year – a rise of 14%. This is despite a small decrease of £9 (1%) over the past three months.
As a result, the average driver now pays £838 per year for their premium.
That’s according to the third 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 July to September this year just £20 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.
Price rises hit older motorists the hardest
Looking at the data in more depth, it seems older motorists are bearing the brunt of price increases.
61-year-old drivers saw the biggest price rises over the past year, paying £100 (23%) more for their insurance.
Meanwhile, 21-year-olds have experienced the biggest annual monetary increases, with their car insurance ramping up by £279 (19%) since last year.
And 17-year-olds have overtaken 18-year-olds for the top spot of most expensive premium, coming in at £2,272 and £2,266 respectively.
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 £116.
However, this is linked to the fact that men tend to drive more expensive cars with larger engines, on average. This usually leads to them having more expensive claims. And they have significantly more convictions than women too.
Men now typically pay £890 for an annual car insurance policy. This is an increase of £91 (13%) compared to last year.
Women are paying £774 on average - just £21 less than their highest ever premiums of £795 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.
Drivers in the Borders region of Scotland have seen the biggest yearly increase in the cost of car insurance.
Prices here have risen 32%, or £164, over to past year to take average premiums to £684.
What’s more, drivers in the Scottish Borders and the East of England are paying the most they’ve ever paid for their insurance. Premiums for the latter stand at £713 – an annual increase of £102.
Find out how prices have changed where you live using our calculator.
Motorists urged to shop around
Amanda Stretton, motoring editor at Confused.com, says:
With car insurance costs rising by 14% in the last year, it’s no wonder drivers are dreading their next renewal date.
The dramatic Ogden rate cut from 2.5% to -0.75% in February 2017 sparked a surge of car insurance price hikes across the UK.
Worryingly, there is every possibility that car insurance prices will be the most expensive on record during the first half of next year.
Drivers wanting to make savings should take note of their renewal price and take a few minutes to get a comparable quote online at Confused.com.