- Drivers paying average or ‘auto-renewal’ price for their motor insurance spend £107.71 more on average than those paying cheapest or ‘shop around’ price, as difference between cheapest and average premium hits 3 year high
- Average premium across age groups hits £675.61 – highest since 2012
- Premiums for under 25 year olds hit £1000 for first time since February 2013*
30th December 2015 – The cost difference between the cheapest and average premiums in the UK is at its largest since September 2012, according to the latest data from comparethemarket.com’s motor insurance index, Premium Drivers. The price difference between cheapest and average motor insurance policies currently stands at £107.71 per motorist – the highest point since Premium Drivers data began in September 2012.
Over the last quarter, the price of cheapest or ‘shop around’ motor insurance premiums, blended across all age groups, has risen by £50 to £567.90. The average, or ‘auto-renewal’, premium has risen by almost £60 to £675.61. comparethemarket.com expects motor premiums to continue to rise in 2016, as the ‘savings variable’, its tracker of price competition, has continued to expand gradually, showing little downward pressure on prices in the short term.
The main reasons behind this surge in costs could be the increase in Insurance Premium Tax, the falling competition in the market and a cyclical hardening market.
For younger drivers, prices are escalating. Even if under 25 year old drivers shop around for the cheapest price, they are likely to pay £1000 to insure their car – the highest point since February 2013. The high cost of insurance for young drivers may be slightly offset for savvy shoppers, as under 25 year olds currently stand to save an average of £236 by shopping around for their insurance – whilst those paying an average price pay over £1230.
Simon McCulloch, Director of Insurance, comparethemarket.com, said: “The cost of motor insurance at the moment is not where most consumers would want to see it. Having enjoyed several years of falling prices, premiums are rising sharply. This has not been helped by the recent hike in Insurance Premium Tax, passed more or less directly onto motorists. In this kind of market it is utterly essential people search out the best deals for their car insurance – by automatically renewing you could well needlessly be spending hundreds of pounds extra.
Click here to download the report.