- Motorists in the UK are now paying £550 for their car insurance, on average, following a £12 (2%) increase year-on-year
- However, loyal customers continue to see their prices increase as 2 in 5 (42%) drivers who received their renewal last quarter saw their prices increase by £39, on average(1) – a £27 increase on the cost of shopping around, despite FCA changes(2)
- A similar picture for home insurance customers, as the cost of a new policy increased by £11, compared to £32 for renewing customers(3)
- Almost a fifth (19%) of drivers who were due to renew last quarter wrongly believed that their renewal price wouldn’t increase, as Louise O’Shea, CEO at Confused.com reminds drivers that changes won’t guarantee a cheaper renewal price
- How to save money on your car insurance: Confused.com expert tips aim to help drivers save more on their insurance as the cost of living rapidly increases
Drivers are paying more for their car insurance compared to the previous year for the first time in 18 months. However, loyal customers could be paying more if they choose to auto-renew, new data shows.
The average cost of car insurance in the UK is now £12 (2%) more expensive compared to this time last year, with drivers now paying £550. That’s according to the latest car insurance price index (Q1 2022) from Confused.com, powered by WTW. Based on six million quotes in a quarter, it’s the most comprehensive car insurance price index in the UK. This is the highest prices have been since the end of 2020, having increased by £21 (4%) in the past three months alone.
While this may come as bad news to drivers, further research by Confused.com shows that loyal drivers could be paying more by choosing to stick with their renewal price. A survey of 2,000 UK drivers(1) found that more than 2 in 5 (42%) of those who received their renewal in the past quarter (Q1 2022) saw their price increase year-on-year, by £39 on average. And, given that the cost of a new policy through Confused.com increased by just £12 in comparison throughout the same period, drivers could have saved money by shopping around, despite the rising prices. In fact, more than a quarter (26%) of those who saw their price increase shopped around and switched insurers, saving £59, on average.
It's a similar picture for home insurance customers, with more than 2 in 5 (41%) of those who received their renewal in the past quarter seeing their price increase by £32, on average(3). However, the price paid by those shopping around and taking out a new policy last March will have only seen an £11 increase in prices, on average(4).
This is the first analysis of car insurance prices by Confused.com since the introduction of pricing changes enforced by the Financial Conduct Authority (FCA)(2), which has put a stop to insurers pricing new and renewing customers differently. Under the new regulations, insurers must offer drivers the same price they would receive as a new customer buying in the same way, banning what was previously known as a new customer discount. Following these changes, 1 in 5 (19%) drivers who received their renewal in the past three months wrongly believed that their renewal wouldn’t increase, with a further 1 in 5 (21%) expecting their renewal price to be cheaper.
However, Louise O’Shea, CEO at Confused.com, reminds drivers that the recent FCA changes do not guarantee them a cheaper or flat renewal price, as any increases in the average cost of car insurance across the UK will also be reflected in renewal premiums. And according to Confused.com, prices have been creeping up for the past six months, with drivers today paying £36 more than those who bought a new policy six months ago, on average. This suggests that the FCA changes may not be the driving force behind price increases. Since the easing of lockdown restrictions, the number of cars on the road has increased. And with more cars on the road, the more claims drivers are likely to make. This in turn means insurers must raise their prices to reflect the amount of money they are paying out for claims. And with the typical cost of pay-outs increasing, their prices will too.
While prices are increasing for most of the UK, there are also some drivers who will see a cheaper price when they shop around, with younger drivers on the receiving end of this good news. In particular, 17-year-olds are now paying a staggering £83 (7%) less compared to drivers of the same age 12 months ago. This brings the average premium for these first-time drivers to £1,166 – the lowest price on record. Similarly, 18-year-olds shopping around will save £23 (2%) compared to 12 months ago, on average. However, despite this helpful saving, this is still the most expensive age for young drivers, with premiums at an eye-watering £1,419, on average. According to the data, prices fall below £1,000 once drivers reach the age of 24.
While prices are typically more expensive for younger drivers, the data also shows that it’s men who are paying out more for their insurance - by around £100(5), on average. Male drivers are now paying £587 for their car insurance, following a £13 (2%) increase in the past year, while women pay £487 in comparison, on average. This is £10 (2%) higher than the price paid by women 12 months ago.
The price a driver pays will also vary depending on where they live, with some drivers paying more than double what others are paying. Inner London is revealed to be the most expensive area in the UK for car insurance, where motorists are now paying £864, following an £18 (2%) increase in the past 12 months, on average. Meanwhile, drivers in the Scottish Borders pay £370 in comparison, despite an £18 (5%) increase year-on-year, on average.
However, like some age groups, drivers in some areas of the UK will see a saving when shopping around for their car insurance. The average cost of car insurance in Manchester and Merseyside fell by £11 (2%) in the past 12 months to £697. This may come as a relief to drivers in the region as it is in fact the most expensive place in the UK outside of London for car insurance. At the other end of the scale, drivers in Northern Ireland have seen the biggest rise in prices in the past 12 months, with the average car insurance premium in the region now £56 (11%) more expensive year-on-year, on average. This means drivers in the region are now paying £581, on average.
On a more local level, motorists in Bolton are seeing the biggest drop in prices year-on-year, as the average premium in the area fell by £31 (4%) to £693. It’s a similar picture in Manchester and Liverpool, where prices fell by £20 and £15 to £782 and £691 respectively, on average.
Meanwhile, a mere £8 (1%) drop in prices in Stockport over the past 12 months puts the average cost of car insurance in the area at the lowest since 2015. Drivers with the Stockport postcode can now expect to pay £518, on average.
While some drivers will be pleased to see their car insurance costs dropping, especially as the general cost of living is increasing at a rapid pace, there are still ways for drivers to bring their premiums down, even if their price has increased. Confused.com has pulled together some expert tips to getting cheaper car insurance, and it could be as simple as being more accurate with your mileage.
Louise O'Shea, CEO at Confused.com, comments: “Just like many of our household bills, car insurance costs are starting to increase, and this is mostly down to the fact that we’re driving a lot more now than we were 12 months ago, and this means the number of claims insurers are paying out on is likely to have increased too.
It's worrying that so many people believed the pricing changes that came into effect in January would guarantee them a cheaper price, and I have no doubt they had quite a shock when they received their renewal notice and it was higher. This is purely down to the fact that the cost of insurance is going up, and this stands for renewal prices too.
Data proves that there still is the need to shop around. Yes, prices have increased, but it’s very likely that there will be another insurer that can offer a better price for the cover you need, as the market is more competitive than ever. And this is why we’re offering to beat your renewal quote or give you the difference, plus £20(6). In the current climate, saving money where we can is more important than ever, so please don’t settle for your renewal, and see how we could help you save money.”
More than six 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
1. Research carried out by One Poll on behalf of Confused.com of 2,000 UK drivers who have car insurance policies. This was conducted between 8 April and 13 April 2022
3. Research carried out by One Poll on behalf of Confused.com of 2,000 adults who own or rent a home who have home insurance policies. This was conducted between 11 April and 19 April 2022
4. Data based on the average cost of a combined buildings and contents policy in March 2021 vs. 2022
5. While the EU gender directive prohibits insurers from assessing a driver based on their sex, there are other risk factors which cause men to have higher premiums. For example, men tend to drive more expensive cars with larger engines and loaded with new technology, on average, which makes for higher-value claims. They also tend to have significantly more motoring convictions than women.
6. https://www.confused.com/beat-your-renewal/terms-and-conditions-car-insurance - T&Cs apply. Must be a like for like policy.
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Launched in 2002, Confused.com was the UK's first digital marketplace for car insurance and is one of the leading brands in the sector, generating over one million quotes per month. It has expanded its range of comparison products over the years to include home insurance, van insurance, motorcycle insurance, and car finance comparison, as well as a number of tools designed to save consumers money.
Confused.com is not a supplier, insurance company or broker. It provides an objective and unbiased 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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