Motorists reducing policy coverage as driving costs climb

High motoring costs are forcing some drivers to cut back on insurance add-ons and breakdown services, putting the UK market at growing risk of a dangerous protection gap.

This is according to research from sale finance firm Close Brothers Motor Finance, released today (26 March 2026), based on a December 2025 poll of some 2,000 18 year-old UK motorists.

Close Brothers Motor Finance said that the research indicated that while the majority of drivers – some 77% – opted for fully comprehensive policies, many consumers were found to be ”underinsured by omission”.

It found that just 48% of drivers carried personal accident cover and fewer still held legal expenses cover (44%), key cover (31%) or tyre damage or puncture cover (16%).

Just 15% of drivers reported guaranteed asset protection (GAP) insurance as part of their policy.

Moreover, the research indicated that one in five motorists had recently cancelled or reduced their breakdown cover in an effort to save money.

Rising costs

John Cassidy, managing director at Close Brothers Motor Finance, said: “It’s clear that motorists are really feeling the pressure of rising costs and are exploring all avenues to cut back on spending wherever they can.

“While avoiding some insurance add-ons may save money, it does also expose many drivers to significant risk – especially with factors such as gap insurance.”

He continued: “Unfortunately, government policies such as the September rise in fuel duty and proposed schemes such as the electric vehicle (EV) pay-per-mile tax continue to place a financial burden on consumers, forcing them to cut corners and leave themselves potentially vulnerable as a result.

“Working with a dealer to understand all finance options available may present a more efficient way for drivers to understand and manage costs on a monthly basis, making it easier to budget and protect against any sudden price increases.”