Motorists are facing a sharp rise in car insurance costs, according to the latest Premium Drivers research from the car insurance team at Comparethemarket. An annual car insurance premium for motorists is up to £651 in March 2023 – a £105 or 19% increase for the same month in 2022.
Car insurance premiums are rising as insurers pass on higher claim costs to motorists. The cost of claims has increased due to an uplift in the value of second-hand cars and higher vehicle repair costs including materials, wages, and energy. Insurance premiums have increased for all age groups.
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However, drivers over the age of 55 are more likely to be paying more than they need to for their car insurance. A separate survey by Comparethemarket found 64% of drivers in this age group are more likely to stick with their existing insurers rather than look for a cheaper deal.
The cost of car insurance is likely to remain higher for the rest of 2023. EY’s UK Motor and Home Results Analysis forecasts that motor insurance premiums will be 15% higher by the end of 2023 as inflationary pressures continue to feed through into claims costs.
Drivers looking to cut the cost of car insurance should consider shopping around for a cheaper deal when their policy comes up for renewal. Drivers could save up to £411 by switching car insurance through Comparethemarket.
Julie Daniels, motor insurance expert at Comparethemarket: “Drivers will be worried that the cost of car insurance is accelerating. Our research shows motor premiums have increased by up to 19% year-on-year. For drivers aged over 55, there is a particular tendency to stick with their existing provider each year.
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By GlobalData“However, due to the steep increases in prices year on year, it’s now more important than ever for people to shop around and compare prices to check you’re getting a great deal.”
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