Confused.com warns that the speed of price-rises is increasing, and the worst could be “yet to come”
Car insurance premiums were at their highest of all 2018 in Q4, according to the Confused.com car insurance price index.
Premiums have increased by 4% (14%) over the last quarter, on average. The annual comprehensive cover now costs around £774, up from £760 in Q3 2018, according to the index.
It is still 6% (£53) cheaper than 12 months ago (Q4 2017), but this is the second consecutive rise since a brief period of softening prices, and confused.com says the speed of price-rises is increasing, and warns that the worst “could be yet to come.”
Confused.com says motorists who stay with their insurer have already seen these increases on their renewal premiums. A survey of UK drivers found more than half (57%) of motorists who renewed their car insurance in the last quarter (October – December 2018) saw their premium go up by £48.
However, more than half of drivers renewed their insurance during these months, renewed with the same insurer, suggesting they did not seek a better deal elsewhere.
Bad news for older drivers
Drivers over the age of 68 saw the biggest price hike, with the average price increasing 8% - equating to +£41 – over the past three months to £544.
Drivers aged 59 and 67 also saw large increases in the average premium, with both ages seeing a 7% increase from last quarter. The equivalent of £35 and £30 respectively.
(Bad) luck of the Irish
Most areas of the UK saw their premiums increase over the past three months. But none more so than Northern Ireland, which has seen pricing trends reverse for the first time since mid-way through 2017, with car insurance costs surging once more.
Northern Ireland saw the average cost of car insurance accelerate the fastest, with prices now £58 (+7%) more expensive than three months ago, with the average cost of car insurance now at £931.
“Check your renewal price”
Louise O’Shea, chief executive at Confused.com comments: “Car insurance prices are gathering momentum and have increased for the second quarter running – and this quarter we have seen prices rise at a much faster pace. This is the last thing drivers need as they face the post-Christmas pinch and as the UK enters a period of economic uncertainty due to Brexit. “If there’s a time to re-think and refresh your finances, it’s now.
”A recent investigation by the CMA revealed customers who stick with the same supplier for household services are facing a combined ‘loyalty penalty’ of £4.1bn a year. And with an impending FCA investigation into ‘hidden’ discrimination between car insurance customers on the horizon, the loyalty penalty issue appears to be wider than we first thought.
“Our own research reveals some customers are paying the price for staying loyal to their insurer, with their renewal price coming in more expensive than the previous year. Worryingly, many motorists are renewing without even attempting to shop around.
“All motorists should be shopping around for the best deal, whether they are a new driver or renewing for the tenth year, as there is always another insurer out there willing to offer you a better deal. At Confused.com, we are so certain motorists will be able to find a better price than their current insurer is offering that we are offering to beat their renewal quote, or give them the difference, plus £20.
“Please don’t pay more than you have to - take a few minutes to check your renewal letter and get a cheaper price.”
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