Research has shown that the cost of car coverage has gone up by 7 percentage points in the past three months. This is putting more strain on household budgets.

This is just the latest price rise to follow rising inflation and surging energy costs. 

The average cost of car insurance premiums in the UK increased from £412.44 in the period between July and September last year, to £443.67 in the period between October to December, according to comparison site MoneySuperMarket.

This is a 7 per cent rise, or more than £30. 

Households are facing even more rising costs as the cost of car insurance has risen by 7%

As the price of auto insurance rises by 7%, household costs are rising even further.

The prices are on the rise after a dramatic drop in auto insurance costs at the start 2021.

Because of the big fall in early 2021, which was a result of renewed lockdown measures, year-on-year prices are still down by 6.6 per cent or £31.14 year-on-year.

The new regulations may also cause price increases. 

New pricing rules instituted by Financial Conduct Authority have prevented insurers from offering cheaper rates to new customers than they offer existing clients who renew. 

Some drivers think the changes mean they will have a flat or cheaper premium. But that may not be the case. Insurance companies could raise the costs of existing policies, instead of reducing the premiums. 

Drivers could be charged a higher renewal fee in the future.

Looking at premiums nationally, drivers in London continue to have the highest premiums at £616.65.

Those in the North West follow with an average bill of £509.60, whilst motorists in the West Midlands pay £504.76. 

Meanwhile, drivers in the South West pay the least at £295.75.

The biggest quarterly price increase was seen in the East Midlands for a second quarter running, with a rise of 9.4 per cent or £37.03.

2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 QoQ £ Change Change in QoQ% YoY £ Change YoY % Increase
£474.81 £401.89 £401.52 £412.44 £443.67 £31.23 7.60% -£31.14 -6.60%

This is followed by the North East, where drivers saw a rise of 8.8 per cent or £33.31, and Scotland where drivers saw an increase of 8.5 per cent or £27.54.

Drivers in the South West saw a small drop in prices of 0.8 per cent, equivalent to just £2.30.

When it comes to age, younger drivers aged 21 to 24 have the highest average premiums at £857.24.

But drivers of every age group saw prices increase, with those aged between 17 and 19 seeing the biggest jump of 17.7 per cent, equivalent to a rise of £60.35.

They were followed by drivers aged between 25 and 29 who experienced a hike of 8.3 per cent, equivalent to £49.64 and drivers aged between 40 and 49 who saw rises of 7 per cent, a jump of £26.78. 

2021 Q3 2021 Q4 QoQ £ Change QoQ % of Change YoY £ Change YoY % Increase
London £594.72 £616.65 £21.93 3.70% -£62.07 -9.10%
North West £488.79 £509.60 £20.81 4.30% -£48.64 -8.70%
West Midlands £476.82 £504.76 £27.94 5.90% -£57.53 -10.20%
Yorkshire and Humber £444.40 £479.07 £34.67 7.80% -£26.62 -5.30%
Northern Ireland £459.86 £472.15 £12.29 2.70% £5.69 1.20%
East Midlands £394.06 £431.09 £37.03 9.40% -£23.43 -5.20%
North East £377.55 £410.86 £33.31 8.80% -£22.29 -5.10%
East £353.02 £377.62 £24.60 7.00% -£35.98 -8.70%
South East £348.73 £369.55 £20.82 6.00% -£24.98 -6.30%
Wales £332.99 £354.06 £21.07 6.30% -£30.10 -7.80%
Scotland £322.56 £350.10 £27.54 8.50% -£16.35 -4.50%
South West £298.05 £295.75 -£2.30 -0.80% -£24.33 -7.60%

MoneySuperMarket car insurance expert Sara Newell said that since a dramatic drop in auto insurance premiums starting in 2021, the prices have continued to rise, and the figures for the past quarter show the largest unwelcome increase.

‘If you’re a driver, it’s really important that you stay vigilant to price rises – particularly against the backdrop of price rises across lots of other household bills and consumer goods. 

If you are nearing the end your current policy, you should shop around to find a better deal.

‘While we welcome the introduction of the FCA’s new measures this month – which prohibit insurers charging existing customers more than new ones – it’s important to recognise that these measures alone won’t save you money. 

Shopping around for new deals is the best way to save money on car insurance., an online comparison site, claims that the most dramatic quarterly increases in car insurance premiums in four years have been recorded by its numbers.

It found drivers can now expect to pay £539 for their car insurance on average, as prices are now £25, or five per cent, more expensive than three months ago.

The data also showed that average prices earlier in 2021 were, at one point, as much as £97 cheaper year-on-year. 

However, the data said that the average cost of car insurance in the UK was now £36 (six per cent) less than 12 months ago, suggesting prices may be returning to pre-pandemic levels.

Figures based upon MoneySuperMarket data as of September 2021.


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