The average price for annual car insurance in the UK has risen by £68 year-on-year in the first three months of 2022, according to the latest research from comparethemarket.com.
The findings show that the average premium now costs £688, compared to £620 for the same three-month period in 2021. This is the most expensive price since the fourth quarter of 2020, when a typical policy cost £724.
The Association of British Insurers has stated that higher premiums are a result of increased cost pressures, including an uplift in the value of second-hand cars, a growing accident rate since the end of pandemic travel curbs, and repair cost inflation.
This comes amid the UK's ongoing cost-of-living crisis, with soaring petrol and diesel costs driving the inflation rate up 7% in the year to March, the highest recorded since 1992, and up from 6.2% in February.
Alex Hasty, director at comparethemarket.com, said: “Drivers will be disappointed that motor premiums are less affordable than in previous years as household budgets continue to be impacted by rising fuel and energy costs.
“Insurance prices began to increase rapidly at the end of last year and premiums have remained high in the first three months of 2022. This is concerning as lots of motorists are already struggling with the cost of driving.”
The cheapest quoted premiums have also increased to £568 from £526 in the first quarter of 2022 – a £42 upswing year-on-year.
However, this widening gap between the cheapest and average premium means greater savings are now available to motorists who switch insurers. Drivers could save an average of £120 by shopping around for the cheapest deal.
Young motorists could benefit from the biggest savings by switching car insurance. The average premium for drivers under 25 stands at £1,225, which is £163 more than in the same three months in 2021.
If young drivers shop around for the cheapest deal when their policies come up for renewal, the research suggests that they could typically save £257 by switching.
“These savings could help to offset rising petrol costs or household bills,” Hasty added.
Image credit: iStock
Author: Chris Seekings