Car insurance costs have reached an all-time high, with some electric vehicle drivers paying more than a third more than petrol or diesel alternatives.
According to comparison site Confused.com, the annual cost of insuring a Tesla Model Y is £1,421, while the equivalent petrol variant, the Vauxhall Mokka, costs just £449.
Prices have risen sharply in the past year, partly due to the high costs of purchasing electric vehicles, but also due to additional inflationary pressures.
The average cost of car insurance has risen by 58 percent in just twelve months, equating to an additional charge of €338 per person.
The average driver now pays £924, setting new records as prices continue to rise, according to six million quotes analyzed by Confused.com.
Why is car insurance getting more expensive?
There are many reasons why car insurance prices are rising so quickly. Adapting to life after the pandemic and recent changes in the industry have had a huge impact on driver pay levels.
Inflation is also an important contributor. The Association of British Insurers said vehicle repair costs rose 33 percent to £1.5 billion during the year, driven by rising costs including energy inflation.
Although inflation has been high for two years, its impact is felt late as supplies and parts prices are pre-set, so motorists are only now seeing higher bills.
The rise of electric vehicles (EVs) has also had an impact. They are becoming increasingly popular, with some manufacturers even saying they will only produce electric cars in the future.
However, this often comes at a high price. They usually have more advanced equipment and therefore cost more to repair. Higher repair costs are borne by drivers, not just EV owners.
Another factor is the ban on “loyalty bonuses”: in January 2022, the Financial Conduct Authority (FCA) banned car and home insurers from charging existing customers higher fees for renewing their policies.
This has prompted insurers to raise prices on their core products to make them more profitable.
Additionally, since the pandemic, many more drivers have returned to their normal driving habits, so there are clearly more drivers on the road. This means that the frequency of claims is increasing and insurers are paying more than in recent years.
Louise Thomas, car expert at car insurance company Confused.com, said: “We are once again seeing some of the highest levels of car insurance inflation for a quarter running. Drivers may have to pay more than ever. Therefore, those who have not yet been affected should be cautious about how prices may affect them at their next renewal.”
Where is the most expensive insurance?
In the last three months alone, insurance premiums have risen by 19 per cent, increasing the average bill by £148.
Perhaps unsurprisingly, central London is the most expensive area in the UK, with the average price currently at £1,503, up £567 (61 per cent) over twelve months.
Prices in London suburbs now average £1,187 after an annual increase of £446 (60%).
Outside London, drivers in Manchester and Merseyside are seeing an annual increase of around £417 (57 per cent), for an average of £1,154.
Meanwhile, the average cost of car insurance in the West Midlands is £1,139, up £442 (63%).
How to save on car insurance?
There are still ways to save on car insurance.
● Pay car insurance annually: If you can afford it, paying for your insurance up front rather than monthly is one way to get cheaper car insurance. That’s because insurance companies often charge interest to spread the cost of your coverage over the course of a year.
● Increase your deductible: This means you can get cheaper car insurance. However, you need to make sure that you can afford to pay if you need to make a claim.
● Check your mileage: In general, the more miles you drive, the more likely you are to get into an accident and file a claim. This means that the higher your mileage, the more you pay for car insurance. Driving fewer miles can be a great way to save on your car insurance. But don’t think that low mileage always means low prices. If you rarely drive your car, your insurance company may also consider this a risk.
● Increase the safety of your vehicle: The more difficult it is for your car to be stolen, the lower the risk. This usually means cheaper car insurance. There are a number of ways to improve the security of your car, including installing a Thatcham approved car alarm or immobilizer if you don’t already have one. Adding secondary layers of security such as: A car lock, such as a steering wheel lock, can also help, as well as parking overnight in a safe, well-lit lot or, if possible, at home in a garage or driveway.
● Use a price comparison site: If you receive a better renewal offer, your best bet is to compare prices. This way, you can be sure that you are getting the best deal that suits your needs and that you are not paying more than necessary. And there is a good chance that you can be saved.
Source: I News
I’m Jeffery Bryant, and I’m an experienced author specializing in automobile news. For the past several years, I have been working as a writer in a well-known news website. During this time, I’ve written hundreds of articles covering automotive trends and developments both nationally and internationally.