Motor insurance premiums continue to increase, new data shows

Go.Compare car insurance has today released new data, showing that the average car insurance premium has risen by 35% in 12 months*.

The latest price index from Go.Compare car insurance shows that in Q2 2022, the average price of car insurance was £347, and then in Q4 2023, it had risen to £465, an increase of 35%. The report also revealed that the most expensive place to insure your car is in London, where the average insurance premium costs around £678 a year, which is 78% more expensive than the South West, where the median cost is £371.

Commenting on the index, car insurance spokesman, Tom Banks, said: “This updated report shows that car insurance premiums, whilst changing each quarter, have been steadily increasing since in the start of 2022, and between Q3 and Q4 2023 alone, premiums jumped by 10%.”

The data also revealed that currently, the cheapest type of car insurance was third party, fire and theft cover (TPFT), which costs £456 annually, slightly lower than the average premium for a comprehensive policy (£467).  According to the Index, third party only (TPO) insurance policies cost £607, almost 30% higher than comprehensive cover.

Tom continued, “Usually, you would expect the most basic level of cover to be the cheapest, but for car insurance, Third Party Only (TPO) policies are the most expensive. It was surprising to see that TPFT policies came out as the cheapest type of policy- it just goes to show how things are changing when it comes to pricing.

“The increasing costs of premiums is being attributed to the rising costs of replacements and repair costs, as well as inflation. We are now seeing these costs being passed onto the policyholder, who is having to foot the bill for these increases.”

In addition, recent research from Go.Compare found that over 80% of motorists have seen their insurance premiums increase this year.** And in an effort to minimise the impact of these rising costs, policyholders are taking matters into their own hands, with 55% of respondents saying they now make sure that they shop around at renewal.

If you have found that your car insurance premiums have increased, you may be able to shop around and find a better deal elsewhere.  Go.Compare has compiled 18 tips on how to get cheaper car insurance, some of these include: 

• Don’t leave it until the last minute: Data from Go.Compare has revealed that the best day to renew insurance on your car is 27 days before your renewal is due.*** The same data also found that the most expensive time to buy your new policy is the day the renewal is due. On average, the longer you leave it to renew your car insurance policy, the more you are going to pay.   

• Mileage: Statistically, the more you drive the more likely you are to have an accident. So if you drive 10,000 miles a year, your car insurance will probably be more expensive than someone who drives only 6,000 miles. While this isn’t always guaranteed, simply driving less could help you lower the cost of your car insurance and it remains important to estimate your mileage as accurately as possible.
• All in a day’s work: It may be worth thinking about how you describe your job and the work that you do. If, for example, you don't commute, you may be able to find a cheaper policy by describing your insurance as being 'for social use’.

Also, the way you describe your job can affect your premium. For example, a 'chef' might pay a different premium to a 'cook’ as even though the roles are very similar in reality, the insurers may treat them differently. But be honest or you risk invalidating your policy.

Tom concludes: “With premiums on the increase, it’s more important than ever that you shop around at renewal as insurance companies will change how they price for certain risks. Just because one insurance company was the right policy for you last year, it doesn’t mean it will be the same this year.”

For more information, and to read Go.Compare’s report on the “Cost of car insurance”, please visit:  https://www.gocompare.com/car-insurance/guide/how-much-does-car-insurance-cost/