2018 car insurance prices
Motorists who fail to shop around when their car insurance comes up for renewal could be missing out on huge savings. To make a year-on-year saving of up to £259*, drivers should shop around by running a fresh quotation
Insurance companies offer their best prices to new customers as they try to add more business to their books. And they subsidise this tactic by charging their existing customers higher prices at renewal. That’s why we urge people always to shop around, so they can be confident they are getting a competitive deal.
This has become more important because our analysis of quotes run on our site shows that car insurance premiums have started rising again. In the fourth quarter of 2018, the median average comprehensive car insurance price we saw was £514. While that was £60 down on the same time in 2017 it was £30 more than the previous quarter (£484).
So why are premiums fluctuating? It is often more expensive to buy car insurance in December as there are more cars needing insurance so insurers don't have to compete as hard for business. That means it is hard to tell if the rise the final quarter of 2018 signals a long-term rise or is just a blip.
There was a similar, but smaller, rise between Q3 and Q4 this time last year and although that turned out to be a blip, other factors were at play then.
Premiums rose in 2017 because of changes to the way personal injury compensation payments were to be calculated. Insurers increased prices to help fund larger expected pay-outs to victims of accidents. But premiums fell again 2018 thanks to a government u-turn, meaning the change did not have the expected impact on compensation awards, reducing the need for premium hikes.
Additionally, a government overhaul of the legal system to reduce the number of fraudulent whiplash claims, which add £35-£40 to every car insurance premium, also helped.
*51% of consumers could save up to £259.84 Consumer Intelligence, November 2018
Average premiums by region
One of the main factors affecting how much you pay for car insurance is population density. The more cars there are on the road, the greater the likelihood of collisions and claims, and more claims means higher premiums. That is why drivers in largely rural areas, such as south-west England and the highlands of Scotland, pay less than those in major conurbations.
Another factor affecting price differentials across locations is crime. Cities such as Birmingham, Manchester and Bradford have high incidences car theft and vandalism. They also host staged accidents between criminals and deliberate crashes with innocent victims used to generate unjustified claims for personal injury such as whiplash.
So when insurers are asked for a quotation by someone living in a postcode where there is a history of crime, they charge a higher premium to reflect the local risk profile.
Tap a region to find out more:
How age & gender affect car insurance costs
Age is a well-established influence on insurance premiums. In simple terms, the younger (and thus less experienced) the driver, the higher the premiums.
Accident statistics show that drivers under the age of 25, and particularly teenagers, are involved in a disproportionately high number of accidents. What is more, these accidents take place at high speed, resulting in serious injuries to a greater number of people because younger drivers tend to carry more passengers than older ones.
The past year has seen the median fully comp car insurance premium for young drivers aged 17 to 19 drop from £1,341 in Q4 2017, to £1,101 in Q4 2018. It had risen slightly from £1,011 in the third quarter of 2018.
‘Black box’ telematics insurance, which allows a driver to demonstrate their safe driving capabilities, is growing in popularity for young drivers.
It is harder to account for the lower premiums charged to women drivers because insurers are not allowed by law to take gender into account when setting premiums.
The likely explanation is that women tend to drive less expensive cars with lower performance capabilities, factors which of themselves attract lower premiums. Also, if women are making fewer claims, they may be moving ahead of men in terms of earning larger no claims discounts.
It’s important to reiterate, however, that pricing discrepancies between men and women are not the result of insurers explicitly charging one gender more than the other, which became illegal in 2012.
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Source information (MSM car insurance quotes, last 6 years, updated on a quarterly basis)
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