The post-Christmas pinch is made worse for motorists in the North of England, as new data reveals the cost of car insurance in the region has increased over the past three months.
The cost of car insurance in the North of England increased by +2% – equivalent to £12 in three months, with motorists in the region now paying £707, on average. That’s according to the most comprehensive car insurance price index in the UK based on more than six million quotes a quarter from Confused.com and powered by Willis Towers Watson.
However, the current price of insurance in the North of England is still -£50 (-7%) cheaper than 12 months ago, despite the increases seen this quarter.
To help motorists in the region see how these increases have impacted their own premiums, Confused.com has created a car insurance calculator. The tool allows users to input their region, age and gender to find out the average cost of premiums for their demographic, compared to 12 months ago.
According to the data, the cost of car insurance in the UK rose +2% over the past three months – equivalent to +£14 – to £774, on average.
This is the second consecutive rise since a brief period of softening prices which began in Q3 2017. And prices are increasing at a faster rate than three months ago, when they crept up by just +1% (+£8) over the quarter (Q3 2018) in comparison. While car insurance is still -6% (-£53) cheaper than 12 months ago (Q4 2017), with the speed of price-rises accelerating, it could be that the worst is yet to come.
It seems motorists who stay with the same insurer are already starting to see these increases reflected in their renewal price. A nationally representative 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 when they opened their renewal notice, on average, as insurers fail to reward loyal customers. However, worryingly, more than half (56%) of drivers who renewed their insurance during these months stayed with the same insurer, suggesting they did not seek a better deal elsewhere.
The Confused.com research comes in the wake of investigations by the Financial Conduct Authority and Competition and Markets Authority, which are unveiling ‘loyalty penalties’ being charged to customers who choose to stay with the same provider, rather than shopping around.
And with the post-Christmas pinch beginning to tighten and the UK in a period of economic uncertainty, Confused.com is urging drivers to check their renewal price and shop around to find a better deal.
To further incentivise drivers to do their research this January, Confused.com is giving motorists the chance to save even more by guaranteeing to beat their car insurance renewal price, or give them the difference, plus £20..
As prices start to ramp up at a pace, motorists will be feeling the pinch when shopping for car insurance, although some more so than others.
In particular, car insurance is more expensive for men out of the two sexes, with the gap between prices for male and female drivers increasing to almost £100.
The cost of car insurance for UK male motorists increased +£15 (+2%) over the quarter, bringing the overall average to £817.
This opens the gap between prices for men and women to an eye-watering +£98 difference since the last quarter (Q3 2018), with women paying £719 in comparison, on average. This is +£11 (+2%) more than they were paying three months ago.
While the EU gender directive prohibits insurers from assessing a driver based on their sex, there are other risk factors which cause men to have higher premiums.
For example, men tend to drive more expensive cars with larger engines and loaded with new technology, on average, which makes for higher-value claims.
They also tend to have significantly more motoring convictions than women, as highlighted in Confused.com’s ‘Gender Gap in 100 Drivers’ research.
However, it is unclear whether these laws will remain post-Brexit, which could result in the gap widening to the same scale seen before the EU Gender Directive was introduced, where men were paying up to £121 more for their car insurance.
While the cost of car insurance is going up for the majority of motorists, drivers of a certain age are bearing the brunt of increases more than others.
In particular, 68-year-old drivers in the UK saw the biggest quarterly hike in the cost of their insurance, with the average price increasing +8% - equating to +£41 – over the past three months to £544.
This is just -£22 less than the most expensive price paid by drivers this age in Q3 2017.
Motorists aged 59 and 67 also saw significant increases in their car insurance costs this quarter, with both ages seeing an extra +7% on top of last quarter’s price, equivalent of +£35 and +£30 respectively.
However, not all motorists will have seen these increases when quoting for car insurance. In particular, the price of car insurance for 17 year olds has in fact dropped to the lowest since 2006, offering some respite for young and potentially new drivers.
The average cost of car insurance for motorists of this age dropped -£349 (-16%) year-on-year, and -£98 (-5%) since three months ago, but is still an eye-watering £1,855.
While car insurance is on the up, motorists will be breathing a sigh of relief, as motoring costs such as the price of fuel has eased, making January that little bit more bearable.
The cost of fuel in the UK started to increase rapidly over the course of 2018, but have been dropping significantly since October, according to Confused.com’s fuel price index.
Petrol in particular has become more affordable, dropping from 131p/l in October to 123p in December, on average. Meanwhile, the price of diesel dropped from 137p/l to 132p/l over the same period, offering some respite to motorists while car insurance prices continue to burden drivers(6).
Amanda Stretton, motoring editor at Confused.com comments: “Car insurance prices are gathering momentum and have increased in the North of England 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.”