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Cost of car insurance up in the past six months

Which? show how to keep your premiums down

car key sitting on top of insurance form

The cost of car insurance is back on the increase, following more than three years of falling premiums.

Latest annual figures from the British Insurance Brokers’ Association (BIBA), published yesterday, revealed that the cost of car insurance fell by 4.4% over the whole of 2014.

However, quarterly data from both the AA and price comparison site Confused shows that prices have started to increase again in the past six months – even though rates remain lower than they were in 2013.

Figures from the AA British Insurance Premium Index reveal that the cost of car insurance was 1.4% higher for the second half of 2014 compared to the first half, while analysis from Confused revealed an increase of 2.4% over the same period. 

Despite the recent rises, the research from both the AA and Confused agreed with BIBA’s findings that prices were lower in 2014 than in 2013. The AA figures showed a drop in the average premium from £660 at the beginning of 2013 to £540 at the end of 2014 and Confused found that rates fell from £736 to £594 across the two years. 

Rates first began to tumble at the start of 2012 when the average premium, according to the AA, was £724. Price cuts were attributed to renewed competition in the car insurance market. Some insurers have claimed the recent increases are linked to a rise in the number of fraudulent personal injury claims.

Although car insurance costs are on the increase, home insurance rates are falling. BIBA research revealed that premiums are down 4.1% for 2014. The AA reported a 5.3% reduction for the year.

Find out more: Cheap car insurance – see our tips to lower your premium 

How to cut insurance costs at renewal

The fall in premiums year on year should mean you make a saving on your car insurance and there are a number of things you can do to slash your costs even further.

Use comparison sites to find the best deals

Check the premiums on comparison sites to find out which insurers are likely to be the cheapest for your needs. Use more than one site if you have the time as they compare different insurers.

Find out more: Top tips for using comparison sites – our guide to comparing products safely

Check the list of Which? Recommended Providers

Compare the results from the comparison sites against the list of Which? Recommended Providers, allowing you to choose an insurer with a high level of coverage and strong customer feedback.

Find out more: Which? Recommended Providers – our car insurance best buys 

If you don’t want to switch, haggle

Insurers are known for saving their best deals for new customers, so if you are coming up to renewal time and you want to stay with your current provider, make sure you haggle to lower your costs. Our haggling guide has a script to help you negotiate a lower premium.  

Find out more: Haggling for better car insurance deals – tips to barter you way to the best rates

More on this…

  • Customer satisfaction – car insurance policies rated by customer satisfaction
  • Car insurance reviews – detailed policy information for all the major car insurance providers
  • Car insurance – how it works and what does it cover – our guide to the basics
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