Car insurance prices continue to rise
- MoneySuperMarket’s latest data puts the average cost of an annual comprehensive car insurance policy at £444
- This is a 6.6% fall compared with twelve months ago (fourth quarter of 2020)
- However, it marks the second time car insurance premiums have increased since the final quarter of 2020, as life gets closer to pre-lockdown restrictions
Average car insurance premiums rose by almost £30 in the fourth quarter of 2021, putting the typical cost of an annual premium at £444.
Car usage and motor insurance claims had started to rise again in 2021 after the national Covid-19 lockdown restrictions eased and drivers returned to the road.
As numbers of cars on the road increased, this meant that the risk of accidents started to rise too – leading to insurers starting to once again charge more for premiums.
The average price of comprehensive car insurance
between October and December
This reduction in the number of cars on the roads resulted in fewer accidents, so insurers paid out on fewer claims. It meant insurers could offer lower car insurance premiums to attract new business.
However, as restrictions have been lifted since 19th of July, more and more people have returned to the roads – and so car insurance premiums have started to rise again to reflect this.
Combined car insurance premiums
Car insurance premiums have continued to rise, as people return to work and school and more cars are on the road.
Car insurance premiums over time
“Our research shows that car insurance premiums are continuing to climb, following the easing of lockdown restrictions. This was largely to be expected, as the number of drivers on the road increased – bring up with it the number of claims and accidents.
“While lockdown restrictions were in place, extra competition for sales caused insurers to lower premiums, as fewer claims meant that insurance was more profitable – providers could therefore reduce prices and pass this benefit on to customers.
“But as more and more people return to the workplace and the roads in general, the number of accidents and claims starts to rise again – leading to premiums also going up.
“If your policy is up for renewal, the best way to make sure you’re getting the right policy for your needs, and at the right price, is to always shop around for a better deal as doing so can save you up to £301*.”
Average premiums by region
- East London drivers continue to pay the most expensive premiums in the second three-month period of 2021, at an average of £860
- Across London, motorists pay an average premium of £617 – the capital saw premiums rise by almost 4% in the last three months
- Drivers in Llandrindod Wells pay an average of £242, the lowest in the country
One of the biggest factors determining how much you pay for car insurance is where you live. Insurers take your postcode and look at how many claims arise in that area.
If you live in a busy town or city where there are lots of cars on the roads, there is likely to be a higher risk of accident, so your premium will be higher than for someone living in a smaller town, village or rural location.
Our latest Q4 2021 data shows that drivers living in East London continue to pay the most for premiums at more than double the UK average (£860).
How age and gender affect car insurance costs
- 17 to 19-year-olds pay an average of £400 for a fully comprehensive policy, down 41% in the past 12 months
- Drivers aged between 20 and 24 pay the highest premiums at an average of £857 – falling by 11.5% in the past 12 months
- Drivers aged over 65 continue to pay the lowest premiums at an average of £259 – down by just over 5% in the past year
Age also has a major impact on car insurance premiums, with under-25s paying at least double that of the over-50s.
MoneySuperMarket’s latest data shows that the cost of annual premiums has fallen by 41% in the past year for drivers aged between 17 and 19, with fully comprehensive cover now costing an average of £400 a year.
Driving tests had been cancelled until the lockdown measures were eased, and fewer new young drivers meant that average premiums had dropped sharply for this age bracket. However with people returning to the roads, young drivers have seen premiums go up compared to the third three months of the year.
It’s now drivers in the 20-to-24 age bracket paying the highest annual premiums at £857, whereas drivers aged 65 or over are paying the lowest average premiums at just £259 a year.
Other factors that affect premiums include your driving history, your occupation, and the make, size and value of your vehicle.
Differences between car insurance costs for women and men are also still apparent, despite insurers no longer being legally allowed to take gender into account according to the European Court of Justice’s Gender Directive.
Irrespective of car insurance premium trends, it remains good practice to shop around when your car insurance comes up for renewal. A little research could result in an average annual saving of up to £301*, so it’s worth comparing car insurance quotes.
*51% of consumers could save up to £301.64 on their annual car insurance premiums. Consumer Intelligence, January 2022.
All premium price data is based on the median cheapest on-screen price for the given period that customers see when running a quote. Premiums are based on MoneySuperMarket customers only and are not representative of the UK average. View our electric car insurance index to see how premiums have changed over time for electric vehicles
From October (Q4) 2018 onwards the on-screen price also includes add-ons in line with the Insurance Distribution Directive (IDD).