Cheap car insurance UK: cheapest places for lower quotes and where you’ll pay most as prices climb

Drivers some regions paying twice as much as others as 2021 brings nine months of cost increases

Wednesday, 19th January 2022, 8:33 am
<p>(Composite: Kim Mogg/JPI Media)</p>

(Composite: Kim Mogg/JPI Media)

Car insurance costs across the UK jumped by an average of more than £31 at the end of last year, with experts warning further rises could be on the way.

After a sharp drop in premium prices at the start of 2021, bills have been rising for the last nine months and in the last quarter of the year jumped by more than 7% to an average of £443.

However, new data based on millions of insurance quotes revealed that drivers in some parts of the country saw a near-10% increase between October and December and only one region recorded a drop in costs.

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The figures from MoneySuperMarket also revealed massive geographical differences, with drivers in some regions facing bills twice as high as those in other areas.

Drivers in the East Midlands suffered the sharpest rise, with bills jumping 9.4% between October and December - equivalent to a rise of £37 - while those in England’s North-East and East saw costs increase by £33 and £24 respectively (8.8% and 7%).

London motorists, however, faced the highest overall bills. Drivers in the capital faced average premiums of £616.65 - more than twice what those in England’s South-West pay.

Those in the North-West. West Midlands, Yorkshire and the Humber, and Northern Ireland also paid well above the average, with costs ranging from £472 to £510.

Drivers in the South-West - the only region where prices fell - paid an average of £295.75 at the end of last year, with Scottish motorists enjoying the second lowest costs at an average of £350.

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Despite climbing for much of the year, average premiums were still around £30 cheaper in December 2021 than in December 2020 but industry observers have warned that prices are likely to keep rising.

Some are predicting that new rules which ban insurers charging a so-called loyalty tax could actually push up prices, while others expect a return to pre-pandemic driving behaviour to lead to an increase in claims and costs.

Sara Newell, car insurance expert at MoneySuperMarket, commented: “While we welcome the introduction of the FCA’s new measures this month – which prohibit insurers charging existing customers more than new ones – it’s important to recognise that these measures alone won’t save you money.

“After a major drop in car insurance premiums at the start of 2021, they’ve been on an upward trajectory ever since, with figures for the last quarter showing the most unwelcome jump yet.

“If you’re a driver, it’s really important that you stay vigilant to price rises – particularly against the backdrop of price rises across lots of other household bills and consumer goods.”

The figures also showed that age continued to have a huge impact on insurance costs. Drivers aged 21-24 faced the highest premiums, with average bills of £857, while those aged 17-19 were stung by the biggest rises at the end of the year, with bills jumping by £60 on average.