Car insurance costs are rising – here’s the best time to renew to save money

Car insurance costs are rising – here’s the best time to renew to save money
Car insurance costs are rising – here’s the best time to renew to save money

Car insurance costs have risen by an average of three per cent in the last year, with young drivers and those who auto-renew hardest hit.

New data gathered from applications on Confused.com has found that the price of insurance has crept up by £23 compared to 12 months ago to an average of £783. And the comparison site has warned matters could get worse due to underhand tactics by insurers.

The past three months are the second consecutive quarter to see year-on-year price rises and the figures reveal that drivers who simply accept their renewal quote are being charged an extra £53 compared with last year.

The findings echo an interim report from the Financial Conduct Authority which said there was evidence of “dual pricing” where existing customers are charged more so insurers can offer new customers better deals.

Young drivers face tough times

Young drivers, who already face the highest premiums, have been hard hit in the latest round of increases. In particular, prices for drivers aged 23 are now £45 ( four per cent) more expensive than 12 months ago, taking them to an average of £1,306. For 19-year-olds, prices increased by increased £42 (two per cent) to £1,938 but they still pay less than 18-year-olds, who pay an average of £2,067.

Read more: Nine ways to reduce your car insurance costs

young female driver
Young drivers continue to pay more than twice as much as the national average for their insurance Photo: Shutterstock)

Female drivers also saw higher than average increases – four per cent compared to two per cent for male drivers – but still pay an average of £84 less than their male counterparts, at £737.

Louise O’Shea, CEO at Confused.com commented: “It’s really disheartening to know that prices are going up over the year. This is the second time this year we have seen the cost of car insurance reach more than the previous year. And given recent investigations into car insurance pricing, the situation could only get worse if new measures mean insurers increase the price for new customers.

“The FCA has found that loyal customers are being over-priced at renewal. But this really shouldn’t be the case. Customers should be rewarded for their loyalty.”

Best time to renew car insurance

The new figures come as separate analysis from rival comparison site MoneySupermarket identified the best time to search for new insurance in order to get the most competitive price.

While many drivers leave shopping around until the last minute, the research has found that by buying at least eight days in advance of your renewal date you can save up to 28 per cent.

Comparing quotes at various stages in the month leading up to a driver’s renewal date found that prices rose suddenly in the final week, going up by an average of 14 per cent by the last day but varying by as much as 28 per cent for some customers.

It also found that there was no benefit to buying a new policy more than eight days ahead of the renewal date as the prices did not vary between 30 and eight days in advance.

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