If you’re looking for cheap car insurance just now, you may want to move fast.

According to The AA’s British Insurance Premium Index, we’re in the middle of one of the steepest rises in car insurance since records began.

In fact, car insurance premiums are rising faster than at any other time in the last 15 years, increasing by 5.6% over the last three months and 14% over the year.

The AA suggests is down to fraud, personal injury claims, uninsured drivers and rising car thefts. Providers are actually paying out more in claims than they are earning in premiums.

Simon Douglas, director of AA Insurance, explains: “Most drivers will be seeing sharp increases when they renew their annual insurance premiums. The index suggests that 89% of insurers have increased their premiums by more than £5 over the past quarter. Only 2.5% cent reduced them."

Cutting car insurance costs

This means there’s never been a better time to compare car insurance providers and make sure you’re finding the best quotes.

People who use the moneysupemarket.com car insurance comparison page save an average of £157 a year. So, if your premiums are rising, comparing the market is a great way to find the right cover at the lowest price possible.

There are other ways to reduce your premiums. Read our article ‘Beat rising fuel prices’ for our top tips on driving down the cost of cover.

Cover for younger drivers

The AA’s findings are pretty bleak for younger drivers. Third party, fire and theft (TPFT) cover – the kind typically bought by new motorists – rocketed by 9.3% over the last quarter.

Newbies looking for cheap car insurance quotes may be less than impressed to discover the average quoted premium even for such basic protection is now £1,059.

Douglas is concerned premiums may be unaffordable or even encourage younger motorists to risk driving without insurance.


“Many insurers are withdrawing TPFT cover and more than half won't insure under 20-year-olds.  In addition, young drivers, who shop around on the internet for their cover, are least likely to remain with their first provider so companies are less likely to offer introductory discounts. 

“With some cheaper insurers moving out of this market, the average quoted premium has increased.”

If you’re struggling to bring your premiums down, watch our video ‘Insurance tips for young drivers’ and read our article ‘How young drivers can put brakes on insurance costs'.

Soaring fraud

Fraudulent car insurance claims cost the industry around £1.9billion every year, according to The AA.

Alongside personal injury claims, this is one of the greatest pressures behind rising costs.

Just this week, a man in Manchester was imprisoned for four and a half years after admitting to a car insurance “crash for cash” scam that cost the industry £1.6million.

Mohammed Patel caused at least 93 crashes over three years by braking suddenly to make the driver behind him hit the back of the car. The owners of the car Patel was driving could then claim for personal injury compensation, pretending they had been at the wheel.

Don’t take the risk

Premiums may be rising at an incredible rate but driving without insurance isn’t worth the risk.

According to the Motor Insurers’ Bureau (MIB), which recently launched a campaign urging people to stay insured, more than 232,000 people were convicted for this offence last year.

They face vehicle seizure, points on their licence and a costly fine – not to mention how expensive their car insurance premiums will be in the future.

Watch our interview with the MIB 'Don't take the risk - stay insured' for more information.