Car insurance prices are continuing their upward trend, putting pressure on drivers’ already stretched wallets. That’s according to the latest Confused.com car insurance price index powered by Willis Towers Watson. Over the last 12 months, prices have increased by 14% - equivalent to £95 - on average. This means a driver can now expect to pay £767 for a typical comprehensive car insurance policy, the costliest amount since mid-2012 when the average premium stood at £797.
Quarter-on-quarter price rises also show no sign of reversing, rising by 4% in Q4 2016, equating to an additional £30 on premiums over the last three months alone. The rise follows two consecutive quarterly increases in the cost of a typical car insurance policy.
Coupled with hikes in insurance premium tax, which is up to 10% from 6% this time last year1, and it’s likely that many motorists will be feeling the pinch when it comes to the cost of owning and running a car.
Looking at the price index in more depth, it’s clear that some motorists have been hit harder than others. In particular, older drivers continue to see the greatest increases. Comprehensive premiums have never been higher for many drivers in their sixties and seventies – those aged 62 (£481), 63 (£494), 64 (£450), 68 (£515), and 71+ (£495), for example, are all experiencing their highest premiums ever. And at 10%, drivers aged 71+ have seen their biggest ever quarterly increase.
Meanwhile, despite teenage drivers only paying between 56% and 75% of their maximum ever premiums, the cost of car insurance for younger drivers remains, by comparison, eye-wateringly high. Average premiums for people aged 26 and under are all over £1,000. And, after 18 months of 18-year-old drivers typically paying the highest premiums, it’s the nation’s youngest drivers, those aged 17, who now pay the most (£2,112). Motorists aged 60 and over, by contrast, can still typically expect to pay less than £500 (the exception being those aged 68 who pay £515 on average).
Both male and female drivers have seen their premiums rise substantially over the last 12 months. However, males have seen prices accelerate more than their female counterparts, climbing by 15% (+£104 year-on-year) and 13% (+£84 year-on-year) respectively. Meanwhile, the fourth quarter of 2016 has seen a further jump of 4% for both sexes from the previous three-month period. As a result, the average man’s premium now stands at £812, while for women it is £711.
Even though EU rules have banned insurers from taking gender in to account when calculating premiums since December 20122, the gap in price between men and women’s car insurance continues to widen. There is now a difference of £101 between the sexes in Q4 2016, the first time the £100 barrier has been broken since the EU rules came into force. By comparison, only two years ago (Q4 2014) the gender price divide was almost half as wide at just £51 and as low as £27 immediately after the rules came into place, with men still paying more on average3.
Looking across the UK, increases in premiums can be felt in most areas, with no region escaping an annual price hike. In particular, motorists in Scotland have faced the highest percentage rises over the past 12 months. Those in the East & North East and the Highlands & Islands regions of Scotland, for example, have seen the average cost of their car insurance go up by 20% year-on-year to £563 and £589 respectively – the highest of any UK region. Drivers in the Scottish Borders region haven’t fared much better. They’ve seen a 19% annual price hike, although they can take some comfort in the fact that at £531 they still typically pay the least of any UK region for car insurance.
Meanwhile, despite Scottish drivers generally seeing higher annual percentage rises, motorists in the English capital still tend to pay the most for car insurance of all UK regions. And people in the Inner London region pay the most of all - their average annual fully comprehensive policy stands at £1,237 in Q4 2016. In real-terms this is up £152 year-on-year, the largest monetary increase of any UK region too. Only motorists in Northern Ireland saw anything close to this, where the average cost of a fully comprehensive car insurance policy has risen by £134 over the past twelve months, the second largest actual increase of all UK regions.
Across the UK’s other capital cities, drivers in Cardiff, Wales face an average price of £714, up 14% from the same time last year. Meanwhile, those in the Scottish capital of Edinburgh can expect to pay around half that of a London motorist - £558, up 12% from the previous 12 months.
While the price index tends to focus on fully comprehensive car insurance policies, third party fire & theft (TPFT) premiums have increased too and have, in fact, never been higher. The average TPFT policy now stands at £1,311, up 15% year-on-year and 5% quarter-on-quarter.
Amanda Stretton, motoring editor at Confused.com says:“Drivers are now paying £95 more on average for an annual comprehensive car insurance policy than they did during the same period in 2015. With the average premium standing at £767, the cost of car insurance hasn’t been this high for over four and half years. What’s more, as prices continue to climb, it seems only a matter of time before we’re back at the £858 peak we saw in 2011.
“And it’s not just the price of fully comprehensive policies that have risen over the past 12 months, with the typical third party fire & theft (TPFT) premium at its highest ever cost too. With an average TPFT policy costing £1,311, drivers interested in this level of cover may want to get quotes for fully comprehensive policies too as in some cases it may work out cheaper.
“These rising prices make it crucial that drivers seek to reduce the cost of motoring wherever they can. As ever, our advice to all motorists is to shop around using a site such as Confused.com, which can help drivers save on their car insurance and slash running costs with our handy tools, tips and guides.”
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Notes to Editors:
More than 4 million quotes are used in the construction of each quarter’s insurance price index - this makes it the most comprehensive insurance index in the UK. Unless otherwise stated all prices referred to are for comprehensive cover.
The following web pages will be updated to reflect the new figures and can be linked to: https://www.confused.com/car-insurance/price-index
3.Car insurance for men is on average higher than for women, for example because certain male-dominated occupations have a poorer claims experience, which is reflected in the premium charged. Also, on average, men drive larger and more costly vehicles.
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Launched in 2002, Confused.com was the UK's first price comparison site for car insurance and is one of the UK’s biggest and most popular price comparison services, generating over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include small van insurance, motorcycle insurance, car buying and selling, and car finance, as well as a number of tools designed to save drivers money on motoring.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com’s service is based on the most up-to-date information provided by UK suppliers and industry regulators.
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