Car insurance increases sees highest price in 12 months as drivers warned of further costs


New research has shown that the cost of car insurance in the UK is now an average price of £539 as prices are now £25 or five percent more expensive than three months ago. This is the steepest increase in car insurance costs in more than four years and puts the average price in the UK at the highest point in a year.

Car insurance prices dropped dramatically throughout the coronavirus pandemic, but since then have seen the steepest quarterly increase since 2017.

Over the past year, prices have been significantly cheaper, with annual savings varying between nine percent to 16 percent when shopping around each quarter.

In terms of monetary value, earlier in the year average prices were, at one point, as much as £97 cheaper year-on-year.

However, the average cost of car insurance in the UK is now just £36, or six percent, less than prices 12 months ago, suggesting prices may be returning to the pre-pandemic levels.

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Louise O’Shea, CEO at, commented on the price increases and the impact it will have on motorists around the UK.

She said: “Car insurance prices rising is not the happy news we wanted to start the year with.

“However it’s also not completely unexpected, as people resume their normal driving habits, and the cost of vehicle repair and replacement continues to increase.

“Although, customers who are shopping around are still receiving prices that are cheaper than 12 months ago, which is especially good news at the moment, as some customers are still seeing their renewal price increase year-on-year.

“If anything, these changes have made the market even more competitive, so there will likely be an insurer out there that could be cheaper or offer a better deal for the cover you need.

“Please don’t settle for your renewal quote from your insurer. We know that there will always be a saving to be made.”

There are warnings that prices could continue to rise even more in the coming months.

If prices continue on the current trajectory of increasing five percent per quarter, average prices could rise to as much as £566.

In light of the recent insurance pricing changes enforced by the Financial Conduct Authority (FCA), Louise O’Shea reminds drivers that these increases could mean that they may receive a more expensive renewal price in the coming months.

This is despite many incorrectly believing that the changes guarantee a cheaper or flat premium.

Under the new regulations, insurers must offer drivers the same price they would receive as a new customer buying in the same way, banning what was previously known as a new customer discount.


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