How much have insurance premiums increased over the past year?
Our latest research reveals motorists have faced a huge jump in the typical cost of car insurance, as the average annual premium has surged to £743 in June 2023, which is a £208 or 39% increase since the same month in 2022.
The cost of car insurance has risen rapidly in part due to the repair cost inflation. Motor insurers paid out £2.4 billion in claims in the first quarter of 2023, up 14% on the same quarter last year, according to data from the ABI. The costs of providing replacement cars while vehicles are being repaired jumped 29% in the last year since Q1 2022, partly due to longer average repair times, meaning that these vehicles are supplied for longer.
Car insurance premiums for younger motorists are on the rise
Young drivers aged under 24 are facing the steepest increases in the cost of their insurance. The average premium for young drivers is now £1,640, having leapt by £510 (45%) in the past 12 months.
Our data shows car insurance is typically the lowest for drivers aged 65 to 79 at £343, as of June 2023. However, the average premium has still risen by up to £89 year-on-year for this age group.
What our expert says...
“Young drivers could save on their car insurance by adding an experienced named driver to their policy. Drivers aged under 24 could save up to £240 on their premium by adding an older driver to their policy. This is a legitimate way to bring down the cost of insurance as long as the more experienced motorist also drives the car.
“Another car insurance cost-saving tip for young drivers is to consider a telematics policy. A telematics insurance policy fits a black box to your car, which monitors your driving and sends data to your insurer to provide a personalised quote. This data enables more accurate risk pricing and therefore could reduce premiums for those who demonstrate that they are safe drivers.”
- Julie Daniels, Motor insurance comparison expert
| Driver’s age | Average Premium – June 2023 | Average Premium – June 2022 | Change (year-on-year) |
|---|---|---|---|
| 16-24 | £1,640 | £1,130 | £510 |
| 25-34 | £770 | £548 | £222 |
| 35-44 | £600 | £449 | £151 |
| 45-54 | £475 | £340 | £135 |
| 55-64 | £367 | £269 | £98 |
| 65-79 | £343 | £254 | £89 |
| 80+ | £547 | £401 | £146 |
Which areas within the UK have seen the biggest increases in car insurance premiums?
Drivers in Greater London have seen the greatest increase in their car insurance premiums on average over the past 12 months. The average premium in London has increased by £368 or 46% in the past 12 months, rising to £1,165 – which is the highest cost of any region.
Motorists in the South West have the lowest average premium in the country at £527, but this is still £120 more than the average for this region in 2022.
| Region | Average Premium - June 2023 | Average Premium - June 2022 | Change (year-on-year) |
|---|---|---|---|
| East Anglia | £689 | £499 | £190 |
| East Midlands | £705 | £514 | £191 |
| Greater London | £1165 | £797 | £368 |
| North East | £661 | £495 | £166 |
| North West | £839 | £607 | £232 |
| Northern Ireland | £697 | £527 | £170 |
| Scotland | £585 | £440 | £145 |
| South East | £668 | £493 | £175 |
| South West | £527 | £407 | £120 |
| Wales | £597 | £446 | £151 |
| West Midlands | £881 | £614 | £267 |
| Yorkshire and the Humber | £822 | £580 | £242 |
What are the best ways to get cheaper car insurance?
A separate survey we ran found 51% of drivers are worried that if the cost of driving continues to rise, they will no longer be able to afford to drive.
In light of this, it’s important that drivers are getting the cheapest price possible for car insurance. We’ve pulled together five key tips to keep in mind for your next car insurance policy renewal.
1. Don’t let your policy auto-renew
Although insurers can no longer quote existing customers higher premiums than new customers, you shouldn’t assume that there isn’t a better price out there. Shop around before your renewal date to make sure you’re always getting the best deal for you.
2. Step your security up
Getting an immobiliser or industry-approved alarm fitted to prevent thefts and break-ins could help reduce insurance costs. Get in touch with your provider to discuss how this may impact your premium.
3. Rethink how you describe your job
Your job title is one of the many factors insurers use to assess your risk. There may be several job titles that accurately reflect your role, but some will return a cheaper quote than others. For example ‘GP’ vs. ‘doctor’. Find out more about how the job title you select might impact your premium.
4. Don’t wait until the last minute to renew
The closer you get to your renewal date, the more you could end up paying for your cover. It’s best to start getting quotes around three weeks before your renewal date - mark this date in your calendar to make sure you don’t miss out on any potential savings.
5. Shop around
It’s always worth checking out your options to see if there’s a better deal out there. Our latest figures reveal that drivers could save up to £457 on their car insurance when they compare providers through us.
Read through our list of 19 top tips for getting cheaper car insurance for more money-saving hints and advice.
Methodology
Insurance data is sourced from Compare the Market.
Up to £240: 51% of Compare the Market customers were quoted less than the prices stated above for their comprehensive car insurance in May 2023 and May 2022. Potential savings based on the difference between the quoted prices for a comprehensive policy with no additional drivers compared to a comprehensive policy with one additional driver.
Up to £457: Based on Online independent research by Consumer Intelligence during May 2023. 51% of customers could achieve this saving on their car insurance through Compare the Market.
ABI cost of vehicle repairs: https://www.abi.org.uk/news/news-articles/2023/6/keeping-motorists-mobile---motor-insurers-payouts-up-14-over-the-last-year/
Verve survey on behalf of Compare the Market, completed by 1,628 UK drivers, conducted May 2023.
Julie Daniels - motor insurance comparison expert
Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.