Premiums for drivers with vehicles under £10,000 soar by nearly 40% in a year

Motorists with a vehicle valued under £10,000 saw their insurance premiums soar during August as the average price of cover reached an all-time high during the month.

That was according to Pearson Ham, which revealed that drivers across the UK were quoted an average insurance price of £511 during August in a statement today (14 September 2023).

This was up 4.8% from July and 41% higher than the figure in August 2022, the pricing consultancy’s analysis showed.

And motorists with a vehicle costing over £10,000 saw their premiums rise by 45%, while those with a lower-valued one saw prices rise by 39%.

“While the growth in car insurance pricing was less acute in August, it still peaked to reach 41% higher than last year, a record all-time high,” Stephen Kennedy, director of insurance pricing at Pearson Ham, said.

Slowing rate?

The higher premiums for consumers came as insurers continue to battle with rising costs.

For example, the ABI noted earlier this month (11 August 2023) that insurers paid out £2.4bn in all motor insurance claims – including theft, vehicle repairs and personal injury – in the first quarter of this year, up 14% from Q1 2022.

Despite the rise in premiums, however, Pearson Ham said there could be a slight slowing in the rate of increase for car insurance premiums going forward.

While prices rose by an average of 4.8% from July to August, this was lower than the 6.3% increase between June and July.

“The costs of repair, replacement and labour have risen significantly, impacting both insurers and motorists,” Kennedy said.

“While there are early indicators that the situation will soon normalise, how sustainable the situation is remains to be seen.”