In yet another blow to people’s finances, the cost of keeping a car on the road has shot up by almost a 20% in the past 12 months.
It means a policy costing £500 last year would now cost around £600.
Young drivers have seen premiums rise the most, up 26%.
The average car insurance premium for drivers aged between 17 and 24 has rocketed from £1,162 in March last year to £1,464 this March.
Compare the Market analysis showed premiums have risen for all drivers – up an average £105 a year.
Drivers in their late 20s and early 30s are paying around £122 more a year.
Even older drivers have seen their premiums leap by more than 20%.
On average 45 to 54-year olds have seen annual premiums rise from £339 to £411.
Those aged between 65 and 79 are paying 21% more this year on average, with annual premiums up from £248 to £299.
Why is car insurance more expensive?
Insurers blamed the pandemic and high inflation.
Global lockdowns caused major supply chain disruption and created a shortage of microchips needed to build new cars.
It put the brakes on supply and pushed up demand for pre-owned vehicles, pushing prices higher.
Repair costs including materials, wages, and energy have also lead to higher car insurance premiums.
How to save NOW
You can keep car insurance costs down though.
By switching insurer when your policy ends, Compare the Market calculates you could save up to £411 a year.
A different survey from Confused.com came to the same conclusion.
It found more than half of drivers would have saved by switching insurer at the end of their deal.
Compare the Market said over-55s were particularly likely to overpay as 64% of drivers in this age group stuck with their existing insurer.
Everyone has their insurance quote generated based on their personal circumstances.
Your age, the car you drive, how you use it, where you live and where you work are all factors.
Review site Nimblefins found that of the large insurers AXA, Direct Line and LV= consistently offered the cheapest premiums when tested.
Often this was through their budget brands such as AXA’s Swiftcover and Direct Line’s Churchill Essentials.
Nimblefins also listed Admiral, Aviva‘s QuoteMeHappy and More Than as consistently competitive.
Ten steps to save on car insurance
- Don’t let your policy autorenew. Use a price comparison site such as MoneySuperMarket, Compare the Market, Confused.com or GoCompare to get quotes from hundreds of insurers quickly
- Check on the insurer’s own website that the same quote isn’t cheaper before agreeing your new policy – going direct can save you money. And remember some insurers aren’t on comparison sites
- Put your excess up – this is what you have to pay if you make a claim before the insurer pays for the rest. A higher excess will bring premiums down
- Consider who else is on your policy – sometimes having a parent as a second driver can bring premiums down. You must put the main car user down as the named policyholder or you are committing a fraud known as fronting
- Drive less – a lower mileage on your policy will bring premiums down
- Pay your premium in one go rather than spreading payments over 12 months – it’s cheaper
- The cheaper the car, the cheaper the insurance – repairs and parts will also be cheaper when you need them
- Ditch the add-ons – a lot of car finance deals come with breakdown cover. Don’t pay for cover through your insurance as well. Also think carefully whether you need extra insurance for legal fees or windscreen protection
- Alloys are flash and expensive to insure. Do you need them?
- Fitting a black box telematics allows insurers to monitor how safe your driving is, which typically brings premiums down