Protyre News
Car insurance prices increase for first time in over 12 months
By Gareth Vrac
The cost of car insurance appears to be creeping up once again, after a period of decreasing costs changes direction.
Car insurance prices in the UK have increased by 1% over the past quarter, on average this will be the first increase in over 12 months (Q2 2017), with the average cost being around £760. This information comes from a comprehensive car insurance price index based on more than six million quotes a quarter from Confused.com and powered by Willis Towers Watson.
While this might seem like a small increase, the last time prices took a similar turn the cost of car insurance started to creep up from £591 to £600 (Q1 2015 - 1%) to an increase of 19% over the following 12 months (Q2 2016).
A nationally representative survey of UK drivers found that more than half of motorists who renewed their car insurance between July and September this year (2018) saw their premium go up on average by £50 when they opened their renewal notice. Although, worryingly, three in five motorists who renewed their insurance during these months stayed with the same insurer, suggesting they did not seek a better deal elsewhere.
With the cost of fuel creeping up to record prices as well motorists are no doubt feeling the pinch, so to help motorists save on the cost of their car insurance, Louise O’Shea, CEO at Confused.com is urging drivers to check their renewal price and shop around to find a better deal before committing to renewing, as it is highly likely that there will be another insurer out there who will offer a better price. Confused.com is guaranteeing to beat their car insurance renewal price, or give them the difference, plus £20.
There are many ways motorists can save money on the cost of their insurance by being savings savvy about the time of day in which they shop. Confused.com data reveals motorists shopping online at 8am received the cheapest price on average and could save up to £783 compared to those browsing in the early hours of the morning (2am), when car insurance is at its most expensive. Overall, the morning (6am – 9am) appears to be the optimum time to get the best prices, while buying car insurance in the evening could add on a few extra hundred pounds.
Although, it seems car insurance prices are still -9% cheaper than 12 months ago, this is due to several changes to the insurance industry including the way injury claims are calculated, known as the Ogden Rate. The UK Government reduced the discount rate to -0.75% in March 2017, meaning insurers had to pay more for personal injury claims driving motorists premiums upwards.
But it’s not just rising car insurance prices drivers are also paying significantly more for fuel that they were a year ago. According to Confused.com’s fuel price index, which collates prices from 83% of the UK’s fuel stations, drivers are now paying 130.8p for petrol and 134.8p for diesel on average. This means that the average driver of a medium-sized car is now paying £75 for a full tank of petrol and £77 to fill up with diesel and if car insurance prices continue to increase it looks like it is could be an expensive year for motorists.
The Stats
Gender Differences
Men are still paying more than women, with the gap increasing to £94 since the last quarter (Q2 2018). Male motorists are now paying £802, on average, while women pay £708, in comparison. 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 which makes for higher-value claims on average. They also tend to have significantly more motoring convictions than women, as highlighted in Confused.com’s ‘Gender Gap in 100 Drivers’ research.
Age Differences
17-year-olds in particular saw the biggest monetary change in the cost of their car insurance, with the average price accelerating by 3% in just three months and, surprisingly, 26-year-olds saw the biggest percentage increase, with their average car insurance cost creeping up by 4% over this last quarter to an eye-watering £1,024, on average. Meanwhile, 18-year-old drivers are still bearing the brunt of sky-high prices, being the only age paying more than £2,000 for their car insurance, on average.
On the other hand, motorists starting to consider retirement may be pleased to know that drivers aged 60+ are now all paying £503 or lower on average for their insurance, still up from £496 in Q2 2018, but are the cheapest prices paid by drivers across the board on average.
Region Differences
In particular, the East Midlands and South-Central England faced the biggest monetary rise of 2/3% respectively. Meanwhile, the average price in the West Midlands increased by +1% in three months, taking the average price to £939 – overtaking Outer London for the first time on record.
Comparing the regions, it is drivers in Inner London who face the most expensive prices of anywhere else in the UK and the only region to have an average cost of car insurance at £1,157 and Manchester and Merseyside are the only other regions with drivers paying more than £900 on average.
On the other hand, the cost of premiums in Northern Ireland appear to be plummeting. Prices in the region dropped a whopping 17% in 12 months following a 16% year-on-year drop last quarter (Q2 2018). Motorists in the South West however are who benefit from the cheapest prices across the board paying £566 on average despite a 3% growth on last quarter.
On a more granular level, motorists in Kirkwall in the Scottish Highlands will be feeling the sting with prices in the area accelerated by a whopping 22% in just three months. This takes the average cost of car insurance in the area to £712. This is just £22 off the most expensive price paid by drivers in the area (Q4 2017). However, this isn’t the only area to have been slapped with big quarterly increases. Motorists in West Central London (Inner London) saw an extra 7% added to their prices, compared to three months ago.
Some areas in the UK also saw their prices increase year-on-year, despite an overall drop in the UK average. In particular, the Hebrides and Kirkwall, both in the Scottish Highlands saw an increase of 1-2% respectively.
Louise O’Shea, CEO at Confused.com comments
“Over a year ago we saw car insurance prices start to decrease, but now it seems prices may be changing direction and starting to creep up once again and there is no telling how long it will be before they start to really accelerate.
Clearly there are still many cases of motorists unnecessarily paying more for their car insurance when it comes to renewing. I personally had to renew my car insurance this month, and while I was quoted a cheaper price than last year by my existing insurer, I managed to save an extra 40% by shopping on Confused.com - £300 cheaper than what my insurer was quoting and this is why it is so important for drivers to be savvy and shop around as there could be a better price out there for them. We are so certain of this at Confused.com that we are offering to beat drivers’ renewal prices, or give them the difference, plus £20(5).
Please don’t pay more than you have to - take a few minutes to check your renewal letter and get a cheaper price from Confused.com.”
The following web page will be updated to reflect new figures: http://www.confused.com/car-insurance/price-index
Notes
Statistics obtained from a nationally representative survey of 2,000 UK motorists carried out by One Poll on behalf of Confused.com. The survey ran between 04/10/2018 and 09/10/2018.
According to Confused.com data, prices quoted between 8am and 9am (8am timestamp) were the cheapest - £929. Based on a sample of 1,000 quote requestors. Data gathered between July and September 2018.
According to Confused.com data, prices quoted between 2am and 3am (2am timestamp) were the most expensive - £1,712 leaving a £783 difference between the cheapest and most expensive. Based on a sample of 1,000 quote requestors. Data gathered between July and September 2018.
Confused.com’s fuel price index collates prices from 7074 out of 8496 fuel stations across the UK. Prices are updated every week: https://www.confused.com/on-the-road/petrol-prices/fuel-price-index. Prices correct as of 08/10/2018
https://www.confused.com/beat-your-renewal. Must be a like-for-like policy.
Car insurance for men is on average higher than for women, for example because certain male-dominated occupations are higher risk to insurers, which is reflected in the premium charged. Also, on average, men drive larger and more costly vehicles. For example, according to Confused.com’s quote data, the average female driver’s car has a 1500 cc engine, compared to 1800 cc for men. Women are most likely to quote for an engine between 1200-1600 cc, men are most likely to quote for a 1600-2000 cc vehicle. Men have twice as many motoring convictions as women. Men drive, on average, vehicles around 10% older and more expensive than women. When men make claims their value averages 15% more than women.
