Average car insurance cost in UK nears £1,000 after prices rise 58%

The average price of car insurance in the UK has broken records to stand at close to £1,000 after price rises of more than 50% last year, according to new data.

Drivers can now expect to pay £995 for their car insurance, on average – the highest price ever in the UK – according to the latest index published by the price comparison website Confused.com.

Prices rose sharply during last year, making car insurance almost unaffordable for many people, particularly if they have made a claim in recent years. Prices increased by an average of £366 (or 58%) in the past 12 months, Confused.com said.

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The staggering rise in the cost of car insurance was been one of the big drivers of inflation, which last year hit a 40-year high. Three-quarters of drivers who renewed a policy in the last three months reported paying more than the previous year – with reports of premiums rising to nearly 90% in some cases.

Motorists aged between 17 and 20 have seen their premiums double on average over the past 12 months, from £1,423 to £2,877, according to Confused.com. The site, in conjunction with the data firm WTW, compared more than 6m car insurance quotes, and averaged the five cheapest sums to come up with its index.

An 84% increase in the price paid by 18-year-olds means they are now paying more than £3,000 for the first time. All drivers up to the age of 43 can expect to pay £1,000 or more for their car insurance, on average, the study said.

London remains the most expensive region in the UK for car insurance. Drivers in inner and outer London pay £1,607 and £1,291 respectively, on average.

Drivers in Northern Ireland have tipped over the £1,000 mark for the first time. A 64% or £350 increase in prices in central Scotland means premiums have doubled in two years, to £897 a year.

In November, Direct Line told City analysts it had increased its premiums by 37%. In August, Admiral announced it had raised prices by 20% during the first half of the year in response to high inflation and repair costs.

Louise Thomas, a motoring expert at Confused.com, said: “Like a lot of our expenses, car insurance is getting more costly. And this is likely to be the case for some time. Claiming is one of the biggest factors when it comes to insurers pricing up policies. And with the cost of paying out for claims being considerably high, insurance prices are going to be too.”

She added: “While it looks like [premium] increases could be slowing down for now, we still need to be doing what we can to keep these costs as low as possible. Things like increasing security, reviewing how many miles you drive or adjusting your excess could bring your overall cost down. Ultimately, shopping around is the only way to know you’re paying the cheapest price available to you.”