Car insurance cost are creeping up: here are the cheapest and most expensive places for cover

Car insurance costs crept up in the final months of 2020 after 12 months of continuous reductions, according to new data.

The final quarter of last year saw a 3.6 per cent jump, according to data gathered by comparison site MoneSuperMarket, pushing the average fully comprehensive premium up from £473 to £490.

That followed four consecutive quarters of falling prices and despite the late rise insurance prices are still an average of 2.6 per cent (£13) cheaper than they were at the end of 2019.

Prices fell throughout most of 2020 as lockdown and other restrictions meant fewer drivers on the road and fewer claims. Separate research by comparison service HelloSafe estimates that insurers saved £4.4 billion as claims fell by 50 per cent over the course of the year.

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The study showed clear geographical differences in costs, with London dominating the table for most expensive postcodes. Drivers in East London paid the most, their average premium of £955 almost double the national average and a huge £686 more expensive than the cheapest premiums, found in Kirkwall.

Motorists in Ilford and Barking, North West London and Southall and Uxbridge faced the next highest premiums, from £833 to £887, with Bradford, Manchester and Birmingham among the most expensive areas outwith the capital.

(Data: MoneySuperMarket)

Scotland and England’s south-west led the way when it came to cheap insurance. Behind Kirkwall which, at £269, had the cheapest average cost in the UK, were Dorchester (£277), Exeter (£278), Truro (£283) and Dumfries and Galloway (£284)·

The analysis found that gender and age continue to have a significant effect on car insurance costs. The 20-24 age group faced the highest premiums - with an average bill of £980. In contrast, the over-65s paid just £274 a year.

Even within the 20-24 age bracket, men were still much worse off. The average cost of £1,143 was £345 more than that paid by women of the same age.

(Data: MoneySuperMarket)

Kate Devine, car insurance spokesperson for MoneySuperMarket, commented: “Our research shows that after a year of falls, prices have started to rise again – something which could be explained by the fact that roads were busier for much of Q4 due to looser lockdown restrictions in many parts of the country.

“It’s hard to say to whether the rises will continue, though. With new lockdown measures now in place following the Prime Minister’s announcement on Monday, a major fall in traffic could lead to lower prices – at least in the very short term.”