Car insurance has become the latest annoyance for drivers being forced to shell out hundreds or even thousands of pounds for cover. The same people have been seeing their prices rise dramatically despite no major changes in circumstances.
Motorists have been quoted with almost comical prices, ranging from around £1,000 for an old banger, £8,000 for a standard Tesla electric vehicle, or more than £14,000 for a Land Rover.
Experts and motor insurance providers have said the price hikes are not without cause. The price of repairs has grown and cars are getting more technologically savvy, requiring the need for specific parts and vehicle-specific engineers.
There have long been calls for insurers to cut costs as Britons struggle to deal with other expensive motoring costs, like prices at the fuel pumps and Vehicle Excise Duty.
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Some drivers are avoiding paying for car insurance because of high costs
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Speaking previously to GB News, Kevin Pratt, motoring expert at Forbes Advisor, said drivers shouldn’t expect the Government to act since the insurance market is a free and competitive market.
He added: “The regulations say insurers must treat their customers fairly, and someone facing a huge increase in their premiums might claim they are being unfairly penalised, especially if they haven’t made a claim and their circumstances haven’t changed.
“But the insurer would successfully rebut this by saying they are setting premiums to reflect their costs.”
He highlighted how the Government could provide immediate assistance to millions of Britons by cutting Insurance Premium Tax (IPT), which has a flat rate of 12 per cent for motor and home cover, with a higher 20 per cent rate applying to other forms of insurance.
A cut to IPT would deliver savings of around £60 and could act as a lifeline to those struggling with costs. Despite this, Pratt told drivers not to hold their breath, as the likelihood of Chancellor Jeremy Hunt doing this is slim to nonexistent.
Another issue is that all car insurance providers seem to have wildly different estimates for average prices, even across age groups, genders and locations.
Confused.com states that the average price for car insurance is the highest on record, which is now to be expected. It estimates that the average driver is paying £995 for a normal policy.
Drivers in London have it the worst (£1,607) and those in South Wales (£778) avoid the brunt of the price hurt. Similarly, 18-year-olds are being battered with frankly outrageous costs of around £3,162, while anyone under 43 can expect to pay less than £1,000.
But here comes the problem. There is no consistency across any major lenders and with drivers being hammered at every possible hurdle they face getting behind the wheel, it adds another layer of awkwardness.
Compare the Market shows that between September and November of 2023, the average premium dropped to an average of £640. It also identifies London as having the most expensive costs at around £1,340, while people on the Isles of Scilly pay more than £1,000 less a year.
However, the Association for British Insurers (ABI) states that car insurance prices have risen, in direct contradiction to Compare the Market. Between October and December last year, prices jumped 12 per cent to £627.
GoCompare lists the average cost of third party only insurance to be just over £600, with further rates of £383 for those over 50. While this is great news for older drivers, it raises more questions.
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Drivers can save on their car insurance prices when switching providers
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Drivers will feel aggrieved with the massive price differences between ages and insurers, while others will question why the Government and insurance providers are doing so little to help at a time when the cost of living crisis is dominating headlines and battering the pockets of everyday motorists.
With the latest data from the first quarter of 2024 set to be released soon, motorists will be laser-focused on the forecasts and whether insurers will continue their profiteering.
The majority of Britain’s drivers know that switching providers is a surefire way to save, but more needs to be done to prevent these extortionate prices from becoming commonplace.
