You are here: Home - Insurance - News -

The mistake costing UK drivers £2bn

0
Written by: Paloma Kubiak
09/10/2018
Car insurance premiums may have stabilised but drivers who auto-renew are still potentially overpaying by £2bn every year, analysis reveals.

Six in ten motorists – approximately 19 million people in the UK – do not shop around for their car insurance, choosing to stick with their previous provider.

But by switching, drivers could save an average of £113 on their insurance cover. For younger drivers, the savings can be more – an average of £326 a year. The table below shows the average saving for each age group.

According to Comparethemarket’s Premium Drivers Index, the average car insurance premium has plateaued after consecutive rises in the last few years. It currently stands at an average £731.

However, the comparison site said insurance premiums are still well above levels seen five years ago, when the average premium stood at £526 – an increase of 39%.

Simon McCulloch, director at Comparethemarket, said the past five years have been difficult for British motorists of all ages who have faced relentless insurance price rises resulting in extremely high premiums across the board.

“The hikes were primarily driven by government changes to IPT [insurance premium tax] and the Ogden discount rate – the impact of which were passed directly onto the consumer. Now with prices holding steady at near record levels, it is essential the government takes no further action to punish British motorists whose financial health will inevitably have been impacted by these changes.

“Motorists however, should not content themselves with stabilising prices – many have the ability to save hundreds of pounds a year. The fact that £2bn may be being wasted through inertia demonstrates how motorists need to take their fate into their own hands. If shopping around became the norm for the majority of drivers, the increased competition would help drive prices down rather than simply hovering at historically high levels.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week