Rising Car Insurance Costs Impose ‘Financial Hardship’ on Millions of Drivers, Surging by £98 Annually

Millions of drivers are facing the need to reduce their home heating ahead of winter due to increasing car expenses. A survey conducted by Forbes Advisor reveals that rising insurance prices and petrol costs are the main culprits behind this issue.

The poll indicates that nearly one-fifth of motorists have had to scale back on heating their homes in order to afford their vehicles. This equates to around 7.5 million people and comes at a time when energy bills are already expected to rise during the winter months.

Within the last year, as many as 92 percent of drivers reported significant increases in their vehicle expenses, with fuel and insurance topping the list of the most expensive costs.

For more information, read: Britons should always ‘place curtains behind the radiator’ to save money this autumn

As a result of these escalating costs, over 40 percent of respondents have been forced to make cuts to their discretionary spending. Areas like clothing and dining out have been sacrificed to make room for car expenses.

In the second quarter of 2023, drivers in the UK paid an average of £511 for private comprehensive motor insurance, marking a 21 percent increase compared to the previous year, according to the Association of British Insurers. Additionally, the average price of a liter of petrol has risen by 9.6 percent since June and now stands at 157p as of October 1.

Kevin Pratt, a car insurance expert at Forbes Advisor, provided insights into the additional financial burden imposed on households when it comes to their vehicles.

He explained, “Car insurance hikes are causing significant financial hardship. Our research reveals that the average motorist has experienced a £98 increase in car insurance premiums over the past year. This figure is even higher for 18-34-year-olds, who have seen their insurance prices rise by an average of £132 in just one year.”

“Insurers are raising prices due to their own increasing costs. Car repairs are becoming more expensive and time-consuming, mainly due to a shortage of skilled workers and supply chain bottlenecks,” Pratt added.

According to Pratt, it is unlikely that insurance premiums will decrease unless inflation eases further. Moreover, the growing economic instability and geopolitical factors suggest that vehicle expenses could remain high.

However, the insurance analyst shared some valuable advice for those concerned about their ability to cope with car costs.

Mr. Pratt suggested, “If your car insurance is up for renewal, start shopping around early, as insurers tend to charge more as the renewal date approaches. When you receive the renewal notice from your current insurer, consider it a signal to start exploring better options instead of automatically renewing without checking the market.”