Motorists have been given more bad news regarding the cost of driving this week as it has been announced by the Association of British Insurers that the cost of car insurance premiums is at the highest it has ever been since the ABI started tracking average insurance premiums in early 2012.
It has been found that the average car insurance premium is now £485, which is £45 more than it was this time last year and £1 higher than the previous record which was set last month. Insurers have blamed a 12 percent rise in Insurance Premium Tax (IPT) in the last two years as well as an increase in whiplash claims and soaring average repair bills, which have jumped by a third since 2013.
This comes on top of the new T-Charge launch last week which has hit drivers in London who own a polluting older diesel vehicle, and the rise in car tax which occurred earlier this year. All of which add up to making it one of the most expensive times to own and run a vehicle in the UK than ever before.
Why are premiums so high?
One reason for the increase in car insurance premiums is the fact that there have been changes to personal injury payouts which mean that insurance companies are having to give people more than they did previously.
This is because the amount of interest that an injured party could gain on their payout has been reduced from 2.5% to 0.75% (called the Ogden rate) meaning that insurance companies have to pay the difference, and these costs are being passed directly onto their customers in premium increases.
In light of this, insurance companies have asked the Government to change the Ogden rate again in a bid to make things fair for claimants, taxpayers, and other customers so they are not being penalized for the drop in interest rates and the effect that this is having.
Another reason that car insurance premiums are on the rise is that the cost of repairs has gone up by around a third, which is another increase that insurance companies are having to pass onto their customers.
(Credit – Images Money/Flickr)
Older drivers hit hardest
So who is being affected the most? According to the latest car insurance price index from Confused.com, female drivers have seen a 13% increase in their car insurance premiums year on year and male drivers have seen a 14% increase, resulting in men paying £116 more than women on average in real terms.
Although insurance companies are no longer allowed to use gender as a factor when working out premium quotes, there are reasons why men are being charged more, including the fact that they often drive more expensive cars with larger engines, and are also more likely to have a driving conviction than women.
With regards to age, 61-year olds have seen a 23% increase in their car insurance premiums over the last 12 months, and 21-year olds have been hit by a 19% rise which equates to around £279 extra per year.
On top of this, 17-year olds now pay the most whereas it had previously been 18-year olds, and their premium will cost them an average of £2,272 per year which is possibly even more than many would spend on their car itself!
With so many different costs that motorists are faced with it is unsurprising that a large number are really feeling a squeeze on their finances, and with the current rise in oil prices expected to result in fuel price rises in November it means that things are set to get more expensive at the petrol pumps too despite drivers enjoying lower prices recently.
Positive news in the Budget a must
A combination of rising premiums, road taxes and fuel prices coupled with the impact of Brexit on the car industry is creating a “perfect storm” scenario on Britain’s roads, which are more congested and polluted that they have ever been. Owning a car has never been more expensive than it is today, it almost feels as if the driver cannot be charged any more for the privilege to drive a car than they are right now.
The Government has the perfect opportunity to take action with the Autumn statement on Nov 22nd. The rumour is that the Chancellor will freeze fuel duty for the 8th year in a row and save everyone 3 pence a litre at the pumps. While this is welcome, I think we are very close to a tipping point where if there is not some form of radical change in Government policy aimed at the cost of being a motorist then I think direct action might be taken by motorists themselves.
What do you think of the fact that it’s now more expensive to be a motorist than ever before? Are the Government basically trying to price people off the roads and get them into public transport? Is being a motorist in Britain fundamentally broken, if so how can we fix it? Let us know in the comments below
complete & utter ripoff, I will certainly be priced off the roads when my insurance comes up next.
been driving nearly 40 years with no accidents & no endorsements & my premiums are through the roof.
I’m in a similar position to Gobsheen – Why, with everything clean do we need to pay a lot more, surely the ones that cause the problems should pay for the privilege of their bad driving?…
Just changed from 2015 1.6 DCi Qashqai to a 2017 model – same variant, same engine. Now 71 yrs old and premium has risen by 49% – ouch.Tried alternative providers, but all a round about same figure – go figure.
I checked the insurance quote on 10 October and it was 760 and I checked today it’s 1123. Total rip off and not a claim or anything. Where does all our money go.
“Owning a car has never been more expensive than it is today, it almost feels as if the driver cannot be charged any more for the privilege to drive a car than they are right now.”
I wouldn’t hold your breath on that – dieselgate was the perfect opportunity for the government to stick it to the driver and that’s exactly what is happening. The increasing costs we’re seeing right now are just the start.
I’m now going to sell my car (now almost worthless since the VW scandal), I’m fortunate enough to be close enough to work to be able to cycle/walk – however I feel it’s just a matter of time before they find a way to price me out of that too!
Two words disgusting ripoff.
Stories such as these still avoid the other reason for price rises!
Shareholders are forever demanding bigger dividends.
Executives want bigger bonuses.
My renewal is in January so am wondering what it will be then, I feel that we all have to pay for the increasing amount of bad drivers who seem to want to be at there destination yesterday with road courtesy at its lowest ever. In the last week motorists are driving faster, will not give way , push through where a bit of give & take would be much better . This all accounts to a rise in road rage thus causing more accidents. Surly it is better to be slightly late than not at all, I feel insurance policies should be decided by how many accidents or claims being your fault then drivers would take more responsibility over there driving & those who have driven more responsibly or have avoided any accidents pay less. Any
of the five claims that I have ever made over 59 years is because others have hit me causing damage, My driving has included most types of PSV , HGV , CARS, AGRICULTURAL VEHICLES , even moving extremely wide QUARRY DUMPERS with Police escorts moving between Cornish China Clay pits on our narrow highways. Ie those who drive the worst pay the most ,
I absolutely agree. My grievance is with drivers approaching a roundabout from my right, who seem to think they have the right to barge in front of me when I am already going round the roundabout and have right of way. I have narrowly avoided a number of collisions in such cases.
Seems like a lot of drivers like myself, who rarely or never, have accidents or claim are utterly cheesed off at subsidising those that do. Facts show that it is the younger ones …. in general … that constantly speed, tailgate are more reckless and impulsive and mess about with phones and music instead of concentrating. The very old are obviously dodgy for different reasons. Amazingly many of the younger are always making out that they are hard done by but the impulsive, gadget obsessed lifestyles are reaping what they sow. Extremely generalisation of course and unfair to those that don’t fall into these categories but you get the gist or flavour and those who hate it the most will be a case of if the cap fits wear it.
What can you do? Just shop around relentlessly and diligently so that only insurers who honour your track record with a good deal will get your business.
It’s what the market will bear as with any other item.
The ‘good’ have always been penalised for the actions of the ‘bad’. Just take the reckless drivers off the road permanently, regardless of their age, instead of making the rest of us pay for them.
I feel that having a car is not a luxury for many. It is a necessity. Public transport is unreliable which is compounded by the fact that most of our roads bad and not properly maintained inspite of mandatory road tax.
As a retired ‘old’ person, I believe the government is robbing pensioners of their freedom to drive their cars having worked for decades contributing to the economy.
The issue of car insurance premiums increase needs addressing seriously amongst others.
There are bad drivers and those who have no car insurance causing damage to other people’s car either in the car parks or roadsides.
I’ve just renewed my insurance (24th Oct) with the same company (LV) same car same declared at fault accident in 2015, increased annual mileage from 12,000 to 15,000 pa, and yet my premium was LESS than last years (£55) and yet I’m one of the “older” drivers, retired & loving it! hence the mileage increase!
Too many bad or incompentant drivers on the roads today remove most of them by re testing those who commit any motoring offence in clouding parking offences it some thought try might be stopped from driving they might take more care These are the ones responsablefor all the insurance rises the many bad irresponibe drivers allowed on our roads
insurance companies can charge whatever they can get away with, they know full well you need insurance to drive a car on the road and charge what they like… never pay on a renewal quote without getting a comparison from elsewhere!!!
just like heating oil prices in the winter, companies know some people get a heating allowance payment and crank the prices up in the winter just to get their greedy mits on it…
btw: one insurance company (AA) wanted to crank up a renwal quote by £400 because of a Vauxhall factory fitted body trim… their a joke…
What annoys me most is that no matter what you do, insurance goes up. No claims, no accidents, nothing. Up you go. My insurance doubled in price from last year, and on the renewal form they even said to shop around as i would be able to get it cheaper. I did manage to reduce it, but still about 150 quid more than last year.
All of the false whiplash claims are now taking their toll (not from me i hasten to add). I would also factor in the amount of calls you get from accident claim companies. Is no wonder people make these claims. 15 years no claims here but still premiums going up.
If i didn’t live 30 miles away from work i might of had to sell the car and cycle it, but being fat and lazy counts that out lol
Why are older drivers over 65 being penalised with higher insurance premiums surley the more experienced drivers should be paying less it’s not fair to blame them when it is a known fact that younger drivers are more likely to have accidents
If they heaped heavier penalties onto the younger drivers they would quite simply drive without insurance. Drivers over 65 would not do this – they would give up the car.
If OAP’s loose the bus pass or have to pay a contribution then it will be cheaper to take the car and pay parking than bear the costs of bus travel. That ammounts to forcing OAP back onto the roads for short journeys and increase polution levels. Just reinsured my car for another year and changed insurer to control increase.
Perhaps, if the insurers didn’t use ‘authorised repairers’ who can charge what they like for labour and pad out the damage, premiums might go down. My son had an accident a few years ago and the repairer was desperate to write off the vehicle so they could buy the salvage and put it back as a cat C or D. Luckily I could prove it was all cosmetic but it was touch and go. No insurance assessor ever saw the car. Enough said.
I’ve kept my present car for the past 6 eyars.I would prefer to have a bigger car ,with more cabin space,but the insurance is prohibitive.hence i drive a small ,older moderr sports car that is subject to much cheaper specialist insurance.Also,because of the cost of fuel,I do not drive distance now. I also ahve a motorcycle,but thats been sat garaged since it was MOT’ed ,last april, for the same reason.I’m 66 with a clean licence
I have a 7 year old Hyundai iX35 – renewal premium quoted at £280. Shopped around and reduced to £220. I am 70 years old. Did the same for my wife’s Fiesta (also 7 years old) and reduced the premium to £175. Where do all these high figures come from???
Where do you live Philip – I am moving there – I shopped around and the best I could get was over 600 (comp, n/c prot, fees and legal cover included) so I went back to my old insurance company that double the premium when someone drove inot me as I was parking.
I am concerned about car rip off insurance premiums. Somebody who has 21 years no claim bonus still paying high car insurance.Gov will not do anything at all as usual.
All I say is are ribbing off. And disgusting.
Some Banker has to take our heating allowance from us and not to mention the increase in pension. Otherwise what is the point of getting it in the first place.
Car insurance is the biggest rip off ever my daughters insurance jumped from £1100 to £2500 when the renewal was due she is 21 has a little black box and drives about 20 miles a week as she works all week and cannot park at her work place when she ask why the huge increase she was told that she drives in high risk areas what utter rubbish never heard of such a load of bull seems to me that they couldn’t find any other reason to squeeze money from her so they made one up
What public transport???. IF your not in London the service is crap. If you want to go anywhere other than the main city, you will have to keep changing buses 3/4 times. It takes hours to get there, and it has cost you dearly in both time and money. Even better, you find that somewhere on the way back the last bus of the day has gone, the time, 19.00 hrs. I say again, WHAT PUBLIC TRANSPORT???.
You have a bus as late as 1900 – try 17.30!!!
I’m an 81yr Young lady confident driver with 56 years experience I drive an 18 yr. Toyota Avensis and never had an accident, yet my insurance went up £75 this year with ( LV)
With Brexit there needs to be a complete change in the way we have done things in the past. We have become the ‘Compensation Society’ where it seems everything is always somebodies else’s fault.
This is why ‘ambulance chasers’ have expanded at such a prolific rate and is costing all so dear like increased insurance premiums and loss of what we can and cannot do for fear of prosecution.
Someone drove into me while I was parking – minimal damage – I reported the incident as my insurance contract requires – PREMIUM DOUBLED.
Apparently fault does not matter because I was moving backwards when the other car drove into me!!!!
Apparently payout does not matter either – so I get penalised the same as if I had claimed for a new back bumper instead of touching the scratch up.
What a rip off – I am incandescent but we all have to be insured (and so we should) but these people have us by the ….. and ….s and there is nothing we can do about it except equip every car with all round cameras and …..
complete & utter ripoff, I will certainly be priced off the roads when my insurance comes up next.
been driving nearly 40 years with no accidents & no endorsements & my premiums are through the roof.
I’m in a similar position to Gobsheen – Why, with everything clean do we need to pay a lot more, surely the ones that cause the problems should pay for the privilege of their bad driving?…
Just changed from 2015 1.6 DCi Qashqai to a 2017 model – same variant, same engine. Now 71 yrs old and premium has risen by 49% – ouch.Tried alternative providers, but all a round about same figure – go figure.
I checked the insurance quote on 10 October and it was 760 and I checked today it’s 1123. Total rip off and not a claim or anything. Where does all our money go.
“Owning a car has never been more expensive than it is today, it almost feels as if the driver cannot be charged any more for the privilege to drive a car than they are right now.”
I wouldn’t hold your breath on that – dieselgate was the perfect opportunity for the government to stick it to the driver and that’s exactly what is happening. The increasing costs we’re seeing right now are just the start.
I’m now going to sell my car (now almost worthless since the VW scandal), I’m fortunate enough to be close enough to work to be able to cycle/walk – however I feel it’s just a matter of time before they find a way to price me out of that too!
Two words disgusting ripoff.
Stories such as these still avoid the other reason for price rises!
Shareholders are forever demanding bigger dividends.
Executives want bigger bonuses.
My renewal is in January so am wondering what it will be then, I feel that we all have to pay for the increasing amount of bad drivers who seem to want to be at there destination yesterday with road courtesy at its lowest ever. In the last week motorists are driving faster, will not give way , push through where a bit of give & take would be much better . This all accounts to a rise in road rage thus causing more accidents. Surly it is better to be slightly late than not at all, I feel insurance policies should be decided by how many accidents or claims being your fault then drivers would take more responsibility over there driving & those who have driven more responsibly or have avoided any accidents pay less. Any
of the five claims that I have ever made over 59 years is because others have hit me causing damage, My driving has included most types of PSV , HGV , CARS, AGRICULTURAL VEHICLES , even moving extremely wide QUARRY DUMPERS with Police escorts moving between Cornish China Clay pits on our narrow highways. Ie those who drive the worst pay the most ,
I absolutely agree. My grievance is with drivers approaching a roundabout from my right, who seem to think they have the right to barge in front of me when I am already going round the roundabout and have right of way. I have narrowly avoided a number of collisions in such cases.
Seems like a lot of drivers like myself, who rarely or never, have accidents or claim are utterly cheesed off at subsidising those that do. Facts show that it is the younger ones …. in general … that constantly speed, tailgate are more reckless and impulsive and mess about with phones and music instead of concentrating. The very old are obviously dodgy for different reasons. Amazingly many of the younger are always making out that they are hard done by but the impulsive, gadget obsessed lifestyles are reaping what they sow. Extremely generalisation of course and unfair to those that don’t fall into these categories but you get the gist or flavour and those who hate it the most will be a case of if the cap fits wear it.
What can you do? Just shop around relentlessly and diligently so that only insurers who honour your track record with a good deal will get your business.
It’s what the market will bear as with any other item.
The ‘good’ have always been penalised for the actions of the ‘bad’. Just take the reckless drivers off the road permanently, regardless of their age, instead of making the rest of us pay for them.
I feel that having a car is not a luxury for many. It is a necessity. Public transport is unreliable which is compounded by the fact that most of our roads bad and not properly maintained inspite of mandatory road tax.
As a retired ‘old’ person, I believe the government is robbing pensioners of their freedom to drive their cars having worked for decades contributing to the economy.
The issue of car insurance premiums increase needs addressing seriously amongst others.
There are bad drivers and those who have no car insurance causing damage to other people’s car either in the car parks or roadsides.
I’ve just renewed my insurance (24th Oct) with the same company (LV) same car same declared at fault accident in 2015, increased annual mileage from 12,000 to 15,000 pa, and yet my premium was LESS than last years (£55) and yet I’m one of the “older” drivers, retired & loving it! hence the mileage increase!
Too many bad or incompentant drivers on the roads today remove most of them by re testing those who commit any motoring offence in clouding parking offences it some thought try might be stopped from driving they might take more care These are the ones responsablefor all the insurance rises the many bad irresponibe drivers allowed on our roads
insurance companies can charge whatever they can get away with, they know full well you need insurance to drive a car on the road and charge what they like… never pay on a renewal quote without getting a comparison from elsewhere!!!
just like heating oil prices in the winter, companies know some people get a heating allowance payment and crank the prices up in the winter just to get their greedy mits on it…
btw: one insurance company (AA) wanted to crank up a renwal quote by £400 because of a Vauxhall factory fitted body trim… their a joke…
What annoys me most is that no matter what you do, insurance goes up. No claims, no accidents, nothing. Up you go. My insurance doubled in price from last year, and on the renewal form they even said to shop around as i would be able to get it cheaper. I did manage to reduce it, but still about 150 quid more than last year.
All of the false whiplash claims are now taking their toll (not from me i hasten to add). I would also factor in the amount of calls you get from accident claim companies. Is no wonder people make these claims. 15 years no claims here but still premiums going up.
If i didn’t live 30 miles away from work i might of had to sell the car and cycle it, but being fat and lazy counts that out lol
Why are older drivers over 65 being penalised with higher insurance premiums surley the more experienced drivers should be paying less it’s not fair to blame them when it is a known fact that younger drivers are more likely to have accidents
If they heaped heavier penalties onto the younger drivers they would quite simply drive without insurance. Drivers over 65 would not do this – they would give up the car.
If OAP’s loose the bus pass or have to pay a contribution then it will be cheaper to take the car and pay parking than bear the costs of bus travel. That ammounts to forcing OAP back onto the roads for short journeys and increase polution levels. Just reinsured my car for another year and changed insurer to control increase.
Perhaps, if the insurers didn’t use ‘authorised repairers’ who can charge what they like for labour and pad out the damage, premiums might go down. My son had an accident a few years ago and the repairer was desperate to write off the vehicle so they could buy the salvage and put it back as a cat C or D. Luckily I could prove it was all cosmetic but it was touch and go. No insurance assessor ever saw the car. Enough said.
I’ve kept my present car for the past 6 eyars.I would prefer to have a bigger car ,with more cabin space,but the insurance is prohibitive.hence i drive a small ,older moderr sports car that is subject to much cheaper specialist insurance.Also,because of the cost of fuel,I do not drive distance now. I also ahve a motorcycle,but thats been sat garaged since it was MOT’ed ,last april, for the same reason.I’m 66 with a clean licence