Premium Drivers Index - Car Insurance Prices

Every quarter, releases research into the latest savings index for car insurance premiums by comparing our ‘cheapest’ and ‘average’ motor premiums across all age groups. The resulting figure can help to give you an idea of how much it would pay off to shop around for your car insurance. In general, the higher the savings variable is, the more you could stand to save by doing your homework and comparing prices.  


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Car Insurance Savings variable

2017 has so far proved to be an expensive year for British drivers; increases in premiums from 2016 show no signs of slowing down. These graphs show that the cost difference between the cheapest and average premiums has grown to £128 – the highest point since the Premium Drivers Index began in September 2012 and the 11th successive quarterly rise. The savings variable itself has reached 17.6%, up from 17.2% the previous quarter, the sixth successive quarterly rise since Q3 2015. This continued high variable means that there could be more opportunities than ever for you to make savings if you compare prices at renewal time.

The average motor premium has risen by £47 (7%) year-on-year to £729 in Q1 2017, up from £682 at the same time last year. The cheapest policies have also increased in price, rising £29 from £572 to £601 over the past 12 months. Insurance premiums have reached an all-time high this quarter; we’ve found that average premiums have risen £170 in under four years, from £559 in Q4 2012, showing how much harder it has become for drivers. What’s more, increases in Insurance Premium Tax and changes to the Ogden Discount Rate (how compensation is calculated) are expected to lead to further growth in annual premiums of around £60 later this year.

Q3 results


Young and older drivers hit hardest

And, as we’ve seen from our bi-annual Young Drivers Report in February 2017, 17-24 year olds are the hardest hit by this price rise. These drivers pay on average £1306 a year for their car insurance, £577 more than the average for all age groups. But they also have the most to gain from shopping around – they could save around £353 just by switching insurance provider.

But it’s not just the youngsters who are feeling the pinch. The average premium for drivers over 50 has risen to £398, up £40 (11%) compared to this time last year, and £63 since the report began 4 years ago. The latest changes stemming from the Ogden Discount Rate announcement could add around £33 to annual premiums for older drivers – so it’s more important than ever to shop around. 

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Simon McCulloch


“Another hike to Insurance Premium Tax comes into effect in June 2017 and, combined with the impact of the changes to the Ogden Discount Rate , drivers can therefore expect prices to continue to rise well into 2017. Drivers of all ages can save money by switching motor insurance provider but it seems the older we get the more likely we are to stick with one insurer. This lack of competition can lead to a market where providers use factors like IPT hikes and changes to the Ogden Discount Rate as an excuse to increase prices and rely on consumer inertia to maintain market share.”

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Past reports

We carry out this research every quarter to find out what the current landscape means to you when it comes to buying your car insurance. Here you can see our previous Premium drivers’ reports to see how the industry has changed over the past year and what this means for your car insurance premium.

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