Car insurance companies like to keep us on our toes, more often than these days as they seem to love increasing the prices each time we receive a car insurance quote, do they not? How do you get cheap car insurance quotes? Why is your car insurance policy increasing?
Why are car insurance costs going up?
Car insurance premiums have risen significantly in the UK in the past year, but what are some of the reasons for this increase? Insurance costs have increased because:
General inflation and rising car repair costs, which make claims more expensive for insurers, says Express
A greater number of payouts for written-off cars, due to the value of used cars increasing
A lack of transparency in insurers’ risk models and an increase in claims following the pandemic, according to the Independent
According to Which, a change in the way the personal injury discount rate is calculated, which affects how much insurers have to pay for long-term injuries
Some drivers have reported increases of up to 70% or more in their renewal quotes, especially those with older cars and low mileage4. However, the average price paid for motor insurance in the first quarter of 2023 was £478, which is 16% higher than in 2022, according to Which.
The best way to reduce the cost of car insurance is to shop around for a better deal, as different insurers may offer different prices for the same level of cover. You can also try to lower your risk profile by driving safely, choosing a smaller or less powerful car, increasing your voluntary excess, or adding a named driver to your policy, says Express.
How much does car insurance cost?
Car insurance costs can vary, from third party car insurance, to third-party fire and theft and comprehensive car insurance, you can buy car insurance for your own car but how much will it cost you?
The average cost of car insurance policies in the UK depends on various factors, such as your age, car model, location, and driving history. According to the Association of British Insurers (ABI), the average price paid for a comprehensive car insurance policy in the first quarter of 2023 was £478, which is 16% higher than in 2022. However, this is just an average figure and your actual quote may be higher or lower depending on your personal circumstances.
According to Niblefins, the average cost of car insurance in the UK rose to £924 in the third quarter of 2023, which is a record high and a 58% increase from the previous year. This is partly due to the rising costs of car repairs, the increased value of used cars, and the lack of transparency in insurers’ risk models.
How to save even more on your car insurance?
There are many ways to save money on your car insurance, but here are some of the most effective ones:
Shop around for the best deal. You can use comparison websites such as MoneySuperMarket or MSE’s Compare+ Car Insurance tool to compare quotes from different insurers and find the cheapest one for your needs. You could save up to £319 a year by doing this.
Choose a car that is cheaper to insure. The type, make, model, and age of your car can affect your premium, as well as the engine size, fuel type, car insurance groups and security features. Generally, smaller, less powerful, and more common cars are cheaper to insure than larger, more powerful, and more rare ones. You can check the insurance group of any car on the Thatcham Research website.
Drive safely and build up your no-claims bonus. Your driving record and behaviour can also influence your premium, as insurers will reward you for being a low-risk driver. If you avoid accidents, speeding tickets, and other offences, you can build up your no-claims bonus, which can reduce your premium by up to 75% after five years. You can also install a black box or a dash cam in your car to monitor your driving and prove your safety to your insurer.
Don’t opt for a temporary car insurance. Temporary car insurance is a type of short-term cover that allows you to drive a car for a limited period of time, without needing to take out an annual policy. The cost of temporary car insurance depends on various factors, such as your age, driving experience, car model, location, and driving habits. Generally, temporary car insurance is more expensive per day than annual car insurance, as insurers consider it to be a higher risk, says Money Super Market. However, it may be cheaper than adding another driver to an existing policy or paying for a full year’s cover if you only need to drive for a short time.
How can my parents help me get cheaper car insurance?
It’s always a good idea to compare car insurance quotes, and if you can use your parents to help make it that bit cheaper, why not? For example, getting a quote for standard car insurance for just yourself for comprehensive cover, can be costly, especially if you want to add on extra things too like breakdown cover or to be insured on someone else’s car at times too. There are a few ways you can make it cheaper though and using your parents to get cheaper car insurance is one of them.
So depending on how often you drive their car, and who is the main driver of the vehicle. Here are some options:
If you only drive your parents’ car occasionally, you can use temporary insurance options such as GoShorty, which allows you to get short-term cover for a few hours or days. This way, you don’t have to pay for a full year’s insurance and you can avoid affecting your parents’ no claims bonus if you have an accident.
If you drive your parents’ car regularly but less than they do, you can ask them to add you as a named driver on their policy. This may be cheaper than getting your own insurance policy, but it will increase your parents’ premium and you may not be able to build up your own no claims bonus. You also have to be honest about who is the main driver of the car, as lying about this is illegal and can invalidate your insurance, says Money Expert.
If you are the main driver of your parents’ car, you will need to get your own insurance policy in your name. However, your parents can still help you by choosing a car that is cheaper to insure, such as a smaller, less powerful, and more common model. They can also help you drive safely and avoid accidents, speeding tickets, and other offences that can increase your premium. You can also install a black box or a dash cam in your car to monitor your driving and prove your safety to your insurer.
Why is car insurance for new drivers so expensive?
It’s no secret that car insurance is costly for new drivers, but why? That’s because new drivers are considered to be a higher risk on the road compared to more experienced drivers. This is based on statistics that show that new drivers are more likely to be involved in accidents, making car insurance claims, or commit driving offences than drivers who have been on the road for longer, says the Money Saving Expert.
Some of the factors that affect the cost of car insurance for new drivers are:
Age: Younger drivers tend to pay more for car insurance than older drivers, as they are seen as less mature and more reckless behind the wheel. The average annual premium for drivers aged 17-20 is over £1,400, compared to £767 for drivers aged 26-30.
Driving experience: New drivers have less driving experience and may not have developed the skills and confidence to deal with different road situations. They may also lack the ability to judge speed, distance, and hazards, which can increase the likelihood of accidents and claims. The average annual premium for drivers who have held their licence for less than a year is over £1,400, compared to £875 for drivers who have held their licence for four years.
Location: The area where you live and park your car can also influence the premium, as different regions have different levels of crime, traffic, and accident rates. For example, urban areas tend to have higher premiums than rural areas, as they have more congestion, theft, and vandalism. The average annual premium for drivers in London is £1,102, compared to £566 for drivers in Scotland.
There are many ways to save money on your car insurance as a new driver, such as shopping around for the best deal, choosing a car that is cheaper to insure, driving safely and building up your no-claims bonus, increasing your voluntary excess, or adding a named driver to your policy.
Will my car insurance cover me if I get hit by an uninsured driver?
Your car insurance policy may or may not cover you if you were to be hit by an uninsured driver, depending on the cover of your existing car insurance policy.
Here are some possible scenarios:
If you have a fully comprehensive car insurance policy, you can make a claim through your insurance provider for the damage to your car and any personal injuries you may have suffered. However, this may affect your no-claims bonus and your premium, unless your policy has an uninsured driver promise. This is a guarantee that your no-claims bonus will be reinstated and your excess will be refunded if you are involved in an accident with an uninsured driver and it is not your fault.
Car insurance customers who have a third-party, fire and theft, or third-party only car insurance policy, you will not be able to make a claim through your insurance provider for the damage to your car or any personal injuries you may have suffered. However, you may be able to claim compensation from the Motor Insurers’ Bureau (MIB), which is a fund that pays out to victims of uninsured or untraced drivers. You will need to provide evidence that the accident was not your fault and that the other driver was uninsured or fled the scene.
If you are driving an uninsured car with your own insurance, you are breaking the law and you will not be covered by your insurance provider or the MIB if you get hit by an uninsured driver. You could face a fixed penalty of £300 and six penalty points on your licence, or an unlimited fine and a driving ban if the case goes to court. You will also have to pay for the repair costs to both your car and the other driver’s car, even if the accident was not your fault, according to Compare UK Quotes.
Your car insurance price can vary depending on lots of different information and it’s likely that car insurance prices will continue to rise here and there. Whether you pay for your car insurance monthly to your car insurance provider, for just one car or more than one car, the cost of your standard car insurance can increase is on the rise.