Car Insurance Costs On The Rise

Thu 7th Oct 2021

The return to working in the office has been blamed for a rare increase in the cost of insuring our cars according to new data.

Motor insurance has fallen significantly over the last 18 months, as a lack of vehicles on the roads has meant fewer accidents and subsequently the insurers have passed on some of the savings to drivers in the form of lower premiums.

But busier roads in recent months have contributed to a small spike in the average cost according to MoneySupermarket. Though it is only a small 2.5 per cent increase, it is a sign that things may be returning to pre-pandemic levels and will be most unwelcome to motorists who are already been hit with sky-high fuel prices. 

The average cost of insurance is up by approximately £10 in the period of July to September, sitting at £412, however prices are still 10.4 per cent down annually.

“Following significant drops in average premiums prices at the start of the year, prices might be on the rise as the economy re-opens and more of us return to our cars,” said Kate Devine from MoneySupermarket.

“Regionally, we continue to see big differences in costs with cities like London seeing higher premiums than more rural places such as the South West.

“This is because insurers factor in a driver's location when pricing policies – so if you're in a built up area, you're perceived as having higher exposure to accident risk.”

Older drivers appear to be hardest hit by the rise, with younger drivers unexpectedly seeing prices continue to drop, particularly in the bracket from 17-29.

“Age, too, also has a bearing, with drivers aged 40 plus seeing the biggest premium increases. 

“This is probably due to older drivers being on the roads more which increases their risk factors.” Devine added.