Average cost of UK motor premiums soar to just under £1,000

The average cost of car insurance in the UK soared to just under £1,000 during 2023, new figures have revealed.

The data, which was published by Confused.com and WTW today (16 January 2024), showed prices surged by 58% in the last 12 months, with UK motorists now paying £995 on average for premiums.

It also revealed premiums have now risen for nine straight quarters since Q4 2021, with the final quarter of 2023 recording an average price rise of 8% (£71).

The index is based on price data compiled from over 6m customer quotes per quarter.

WTW highlighted that the cost of repair and prices of used cars were among factors contributing to the increase.

Tim Rourke, UK head of P&C pricing, product, claims and underwriting at WTW, said: “The cost of car insurance spiralled in 2023 primarily due to the soaring price of used cars, although there is evidence of a market readjustment with values having slipped for the last four months.

“Insurers have also had to pass on the rising cost of spare parts and materials, more expensive repairs as cars become more sophisticated, labour shortages, extended vehicle loan times and a spike in personal injury claims.”

Regions

The data also revealed that all regions across the UK recorded price rises of over 50% in insurance premiums over the last 12 months.

Drivers in central Scotland saw the largest percentage increase of 64%, while the smallest annual increase was seen in central and north Wales, where drivers still saw an annual rise of 51%.

The south west of England continues to be the cheapest region for car insurance, with average premiums now costing £636.

Inner London remains the most expensive region, where prices are now on average £1,607, while Manchester and Merseyside (£1,233) and the West Midlands (£1,224) remain the most expensive areas outside of the capital.

Steve Dukes, chief executive of Confused.com, said: “UK motorists won’t be surprised by news of record car insurance price rises, but they will be disappointed. The crumb of comfort will be that increases are somewhat smaller than in previous quarters, so many will be hoping this is a sign of a more stable period ahead.

“In addition to the average price rises, we have seen different customer groups affected to increasingly different degrees. Understanding and reacting to this has become increasingly important to insurance providers looking to make more informed pricing decisions.”