Average car insurance bills soar to almost £1,000 – costs rise by £284 in just ONE year

The average car insurance bill in Britain has soared to almost £1,000, with costs rising by £284 in the last year.

Shocking new figures have revealed rising car insurance premiums, with average costs soaring by £403 in the last three years.

In the last year alone, the average cost of car insurance has risen 43 per cent, from £657 in the first quarter of 2023 to £941 in the first quarter of 2024, says comparison site Confused.com.

The staggering figures lay bare the additional costs faced by cash-strapped motorists, as well as other financial pressures arising from the cost of living crisis.

Drivers are increasingly angry at the price they are being charged; Earlier this week, an MP told a government committee that her constituents “I feel like insurance is becoming a scam.”

The average cost of taking out a new car insurance policy in the UK is now £941, according to the latest index from Confused.com.

Although this figure is actually £54 less than in Q4 2023, when average prices reached £995.

Although prices have dropped slightly compared to the end of last year, drivers are still paying much more now than in 2021.

Between January and March 2021, drivers only paid £538 on average, rising to £550 over the same period in 2022.

However, after the Covid pandemic reduced car insurance premiums for many, due to reduced road traffic which reduced claims, average prices began to rise last year. In 2023, they increased from £657 at the beginning of the year to £776 in the second quarter, £924 in the third and finally reached £995 at the end of the year.

The price of car insurance can vary significantly depending on a person’s age, driving history, car, and location. Insurers are not intended to set prices by gender, but there remains a wide variation between average costs for men and women.

Men now pay £1,001 on average for their car insurance compared to women who pay £841 on average, with a difference in price of £160.

According to Confused.com, this is because men have a higher risk profile than women, as they tend to drive “more expensive cars, with bigger engines and more technology”, leading to a more expensive claim if suffer an accident.

Young drivers receive thousands of blows from the car cover

According to the data, younger people are also likely to receive a higher insurance premium.

17-year-old drivers now pay an average of £2,919, or £1,307 more than last year, while 18-year-olds pay £1,300 more than 12 months ago, with prices rising from £1,845 in 2023 to £3,145 in 2024.

This compares to current prices for people aged 45, 55 and 65, which are on average £892, £666 and £545 respectively.

Insurers blame the increases on inflation, pointing to the price of repairs and labor costs. Cars have also become more expensive to repair due to the need to replace entire damaged sections rather than smaller pieces.

Prices are also rising due to the increase in the number of cars on the roads since the Covid-19 pandemic, meaning there are greater risks of collision with other vehicles.

However, critics have argued that car insurance prices have increased more than necessary. The monumental rise in the cost of car insurance has led some motorists to express their anger at such price increases to their local MP.

Treasury Committee member Dame Angela Eagle appeared at a hearing on insurance earlier this week and explained her constituents’ frustrations.

She said: ‘My constituents and many people who write to the commission feel that insurance is becoming a scam.

‘As the price is rising, it is more difficult to file a claim; People, when they file a claim, often have to wait a long time or are not treated very fairly.

“And that is especially the case for compulsory insurance, such as driving insurance.”

He asked David Mendes da Costa, senior policy director at Citizens Advice, if that is the kind of approach the charity sees.

He said: “I think people who come to us for support… are offered the price they are offered and have no idea what is behind it.”

“And often they won’t be aware of the fact that, depending on where they live and their zip code, for example, they may be charged a lot more than someone who might be right across the street from them.” or a few streets down.

“There is no transparency, and I think that lack of transparency is probably what drives the low levels of trust that we see in the sector.”

Mendes da Costa told the hearing that the charity is seeing a “clear increase” in people asking for help who cannot afford their insurance.

He said: “To be clear, insurance is really essential, especially when it comes to car insurance, at least.” People need it to drive and people need to be able to drive to look for work, to go to work, to make hospital appointments or to take their children to school.’