The cost of car insurance is soaring – with drivers now being charged on average £251 more for an annual policy than they were a year ago.
Motorists are being warned to expect quotes which may be hundreds of pounds more when their cover needs renewing, as the impact of high inflation is felt across the motoring market.
Latest figures from Compare the Market, which has been tracking rising prices, suggest that on average drivers will need an extra £251 to meet the average cost of a new policy.
Young drivers appear to be most badly affected by the sudden increases – where cover for motorists under the age of 24 has risen from just under £1,200 a year ago to almost £1,800 last month.
In July, price comparison site Confused.com warned that motorists could be in for a ‘shock’ as inflation, higher repair bills from mechanics and an increase in insurance claims post-Covid were all showing signs of contributing to rising prices.
The most recent data from Compare the Market, which has compared the price of premiums in August 2022 with last month, highlights that while young drivers are now being charged close to £600 more, motorists of all ages are feeling the pinch.
Julie Daniels, director at Compare the Market, said:“The rising cost of car insurance is understandably causing concern among many motorists.
“Compare the Market’s latest data has revealed that average car insurance premiums have increased by up to £251 year-on-year, reaching £794 in August 2023. The increasing price of premiums has been partly driven by a rise in the cost of claims for insurers.
“For drivers hoping to save money on their car insurance, one of the best ways to ensure you are getting a great deal is to compare prices online.”
Consumer champion Martin Lewis is among those to have raised concerns at the rapid rise in both the price of car and home insurance. He is encouraging drivers to check their policy even if they’re not immiediately close to a renewal date.
In a message on website Money Saving Expert, he explained: “My email-bag has been rapidly pinging with irate consumers reporting huge insurance renewal hikes.
“The latest stats back up the on-the-ground fury, showing shocking rises compared to this time last year.
“Insurers say it's due to things including rising car repair costs, more subsidence housing claims and overall inflation. Whether that justifies it or not is moot, car insurance is a grudge purchase, you've no choice. So my clarion call is – take a few minutes to check if you're overpaying. If you are, even if you're not near renewal, you may be able to lock in a price to forestall future increases for a year.”