The average car insurance policy in 2024 is £1,361 compared to £919 in 2022 according to exclusive data supplied by Mustard. While this figure may not represent the entire UK average, it represents an increase of more than 40% in less than two years – way above the rate of inflation.
Research from Consumer Intelligence backs up these above-average increases in premium prices, showing a rise of 14.6% in the past year — which is five times the current inflation rate. Some drivers will certainly be hit harder than others on their car insurance quotes because of this.
The rocketing increase over the past 12 months boils down to a number of contributing factors. One being inflation; claims can take several months to settle, and the economy can change at the drop of a hat during that time.
With the inflation rate hovering just above 3% in the UK as of April 2024, it’s no surprise that cheap car insurance is hard to come by. New cars are also becoming more sophisticated, which has a knock-on effect to vehicle repair prices. This cost is now being reflected in the everyday motorist’s insurance quotes.
However, with a few expert tips and hints you can keep your premiums down.
What driving demographic is going to be affected most by premium increases?
Unfortunately, motorists under the age of 25 are likely to suffer the most, facing sky-high insurance costs on top of costly learning expenses. Despite a relatively low rise, under 25s will see an 11% increase in premiums, with the average policy sitting at £1,719 — the highest among all age groups in the UK.
However, it’s not just younger and newer drivers impacted by premium surges. For over 50’s, insurance costs will rise by 16.5%. That’s slightly above the UK average, too. But age and experience do come with discounts, with the average policy price being £434 for over 50s — considerably lower than younger drivers.
But fear not. There are a few things young drivers specifically can do to combat the pricey premiums.
- Consider a telematics or black box policy
Having a telematics system (black box) installed in your car will help your insurance provider monitor your driving and potentially reduce your renewal price. While this is a great option for first-time drivers, it also appeals to experienced motorists who, despite their years on the road, still fall into the under 25-category that concerns insurance providers.
- Try and avoid paying monthly
Although it might be tempting to spread out the insurance cost with monthly payments, think twice unless you’re prepared to pay even more on top of the quoted price. Insurance providers will charge you more for choosing a finance option as apposed to paying upfront. Of course, this is not always feasible for people, especially motorists falling into the younger demographic.
If you’re lucky to have a family member willing to lend you money, repaying them monthly will be cheaper than the interest charged by insurance companies for payments.
Parkers tips for reducing your insurance premiums in 2024
- Shop around for your renewal price in advance
We have all been there. It’s the night before your car insurance is due and you’re frantically shopping for a renewal price, slowly realising that leaving it until the last minute was a mistake. Allowing yourself a couple of weeks to browse insurance quotes from different providers and look at comparison sites will give you much needed time to find you the cheapest offer possible.
- Choose the right car
If you’re planning to buy a new car this year, take the time to research the vehicle’s insurance group before making a decision. In the UK cars are placed into groups from 1-50, it’s as simple as the lower the group the cheaper the car will be to insure. Each insurance provider assesses vehicles differently.
For instance, opting for a small-engine car like a 1.1 litre hatchback could place you in a lower insurance group, potentially resulting in a better premium. There’s a reason you generally see young drivers in Vauxhall Corsas or Ford Fiestas. An SUV with a larger engine is likely to fall into a higher group, regardless of a drivers a clean driving record or years of experience on the roads.
Though the age of your car doesn’t directly affect the price of your car insurance, there is data to consider such as the cost of replacing parts and the number of safety features. With inflation on the up repair prices are becoming costly for new sophisticated cars as they value more — that’s not to say don’t purchase a new car. Generally, newer vehicles are equipped with better safety features, favoured by insurance providers as it lowers the risk of a claim being made.
Whereas, older models are also desired by insurance providers as parts for repairs for the vehicle are generally more readily available and cheaper. This may seem confusing, but the most important part is knowing what insurance group your vehicle falls into before purchasing it.
- Limit mileage
This may vary among drivers, but consider restricting your annual mileage. When obtaining an insurance quote, you’ll be asked for your average yearly mileage. Provide an accurate estimate; while it might be tempting to reduce miles for a cheaper premium, doing so can invalidate your contract and prove costlier in the end. After all, less time on the roads means less chance of an accident.
What this means for you
The vast majority of drivers are going to be affected in the UK, the current economic climate’s unpredictably is driving up costs across various aspects of car ownership, with insurance premiums standing out as a significant expense.
If you sit in the under 25 or over 50s bracket as a driver, you will likely see the biggest increase in premiums. But staying on top of the latest advice and tips to reduce your insurance could make a significant difference in the costly prices.
For all the latest advice, news and finance deals, sign up to the Parkers newsletter here.
