The average car insurance premium in Q4 2018 rose marginally over the last quarter and now stands at £744 – an increase of £12 compared to the previous quarter’s £732. Premiums rose by over £33 over the past three months, from £727 in September to £744 in October, before reaching £761 in November.
Over the past five years the cheapest premiums available have also become significantly more expensive. The average cheapest premium available to drivers in Premium Drivers records was £447 in Q3 2014, a difference of £181 compared to today’s levels (£628).
The data suggests that the era of high motor insurance premiums is not coming to an end. The average premium has risen by 41% since its lowest point in Q3 2013 when it stood at £526. This means that motorists are paying an average of £217 more for their car insurance today than they were five years ago. Over the year, premiums have fallen only £13 since their peak in Q4 2017 when they reached their highest price on record at £757.
Shopping around remains the most effective way to save money on car insurance. The difference between the cheapest and average premiums stood at £116 in Q4 2018. For motorists aged 17-24, the price differential is even higher. The average young driver now pays an average of £1,520 but stands to save £324 by comparing providers.
Dan Hutson, Head of Motor Insurance at comparethemarket.com, said: “Motor insurance is still a significant expense for British motorists. Prices have fallen slightly over the past 12 months but drivers are still paying hundreds of pounds more to insure their vehicle than they were three, or even five years ago. However, the potential saving of £116 gives motorists some hope. As premiums have risen, so too have the potential savings to be made. The only way to mitigate these rises and encourage competition amongst providers is for consumers to shop around every year.
“The spiraling cost of insurance is thanks in part to hikes to Insurance Premium Tax which has doubled from 6% to 12% since 2015. This is a costly tax, passed on to customers by insurers, and disproportionately hits young people who already pay, on average, over £1,000 to insure their vehicle and stay on the road. We are urging the government to redress the balance and scrap or cap IPT for young drivers.”
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