• Average premium between September and November 2012 was £559 vs £758 for the same period in 2017 – a rise of £199
  • Gap between cheapest and average premiums widened to £129 in November this year – the greatest difference on record

2nd January 2018 – Average motor insurance premiums have risen by almost £200 over the past five years, according to research by comparethemarket.com. Between September and November 2012, the average motor insurance premium stood at £559, but today premiums for the same three months have reached an average of £758 – a rise of £199.

Various factors have driven car insurance costs to accelerate over the past few years, including multiple rises to Insurance Premium Tax (IPT). Since March 2015, IPT has doubled to its current level of 12%.

The changes to the ‘Ogden’ rate, or Personal Injury Discount Rate, have also increased the cost of insurance for motorists. In February 2017, it was announced that the rate would be moved from 2.5% to -0.75%, meaning personal injury claims costs would increase, putting upwards pressure on premiums. After the changes were implemented in late March, premiums rose by £20. By November, average motor insurance prices had risen by £50 in only eight months. Despite this, the rate is expected change again, to somewhere in the 0% to 1% range, which should help take some pressure off premium inflation.

In addition to the impact of IPT and the uncertainty around the Ogden rate, premiums tend to be even higher in the later months of the year, meaning December’s average premium could be even more expensive, possibly exceeding the £800 mark.

Simon McCulloch

Simon McCulloch



“Over the past five years, we have seen non-stop cost pressures on British drivers, who still face ever increasing premiums. The gap between the average and cheapest premiums is now at record levels, at an average of £129, showing the very real savings that can be made by switching providers.


“The impact of the Ogden rate change announcement in February was immediate, as premiums quickly shot up by £20 on average in March. After insurers then successfully lobbied for a review in September, most expected premiums to fall and stay lower. While there is some uncertainty around the new rate, and some insurers may be cautious and planning for higher costs in the future, it is still likely to be a lower discount than what was previously applied. The real impact of the Ogden changes will be easier to analyse later in 2018 but for now, drivers are still having to face record level motor cover costs.”

comparethemarket.com’s Premium Drivers index has tracked a steady and continued increase in premiums since its records began in 2012, demonstrating the mounting financial pressures that drivers face when getting, and staying, on the road. While the average premium over the past three months stood at £758, the cheapest premium available on the market this quarter stood at £629.

All data, other than that referenced in the footnotes, is sourced from comparethemarket.com.

When the “average price” is referred to, this is the mean average of the top five cheapest prices presented to a customer, where a consumer has clicked through to buy. Buying from the top five cheapest prices presented represents 90% of all car insurance sales. When the “cheapest price” is referred to, this is the average cheapest price presented, where a customer has clicked through to buy.

Premium Drivers calculates the cost of premiums where the customer has clicked through to buy the policy. If the average premium cost was instead calculated on the basis of all prices returned then the average cost would be significantly higher.