We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.

Are ‘stealth charges’ driving up the cost of your car insurance?

New research shows rise in 'stealth charges'

Car key with notebook calculator and pocket money on wood table

Car insurers have hiked the costs of administration fees since 2012, leaving drivers paying significantly more for their cover, according to new research from Go Compare.

The price comparison site found a marked increase in ‘stealth charges’, such as adjustment fees, cancellation charges and other administrative fees, between 2012 and today.

Here, we look at how much more drivers have to pay in car insurance fees and how to find the best policy for you.

Car insurance ‘stealth charges’ rise

Car insurance providers often charge administrative fees to cover the cost of managing your policy, and these fees are on the rise.

Cancellation fees have spiked 49% since 2012, with the average car insurance provider now charging £60.85 if you decide to cancel your policy.

The cost of adjusting your policy has increased too. Drivers can expect to pay an average of £28.25 in adjustment fees, up 38% from £20.51 in 2012.

Setup fees, which aren’t charged by many car insurance providers any more, have increased the most. Since 2012, the cost of arranging a car insurance policy has increased 82%, with the average cost rising from £37.63 to £20.66.

Best car insurers for fees

Administrative fees aren’t the only charges drivers can expect to pay.

Some car insurance providers will also charge you for things like paying monthly or even renewing your policy.

Yet some providers charge a lot less than others, while some do not charge fees at all.

In January this year, we analysed the policies of over 30 car insurance providers and uncovered which providers are the best and worst when it comes to charging fees.

NFU Mutual, which doesn’t charge any fees, received a Which? fee score of 100%.

This was closely followed by Age UK car insurance, which only charges interest for drivers who pay their car insurance monthly.

The table below shows the top five car insurance providers for charging fees.

Provider APR Policy Adjustment fee Duplicate document Cancellation fee after 14-day cooling-off period Cancellation fee during 14-day cooling-off Renewal fee Which? fee score
NFU Mutual 0% No fee No fee No fee No fee No fee 100%
Age UK 17.5% No fee No fee No fee No fee No fee 96%
Direct Line Variable No fee No fee £48.16 No fee No fee 82%
John Lewis 23.5% £15 No fee £40 No fee No fee 80%
Co-op Insurance 19.5% £15 £15 £50 No fee No fee 78%

Car insurers with highest fees

Swinton car insurance charges the most in car insurance fees and only received which? fee score of 54%.

The insurer bills drivers for charges across the board, including interest on monthly payments, cancellation fees and renewal fees.

Quote Me Happy was the second-worst provider for charges and drivers can expect to pay for fees for adjusting their policy, cancellation and paying in monthly instalments, too.

The table below shows the five worst car insurance providers for fees.

Provider APR Policy Adjustment fee Duplicate document Cancellation fee after 14-day cooling-off period Cancellation fee during 14-day cooling off Renewal fee Which? fee score
Swinton 35.6% £0 online/ £25 by phone No fee £50 £25 £25 54%
Quote Me Happy Variable £33.60 No fee £56 £28 No fee 58%
Saga 26.7% £25 No fee £50 £5 £25 55%
Ageas 29.9% £0 online/ £25 by phone No fee £50 £25 £20 55%
Sheilas’ Wheels and Esure 27.9% £26 No fee £60 £26 No fee 59%

Find out more: best and worst car insurance

How to find the best car insurance

Finding competitively priced car insurance that suits your needs can be tricky. There are, however, a number of ways to get the best policy for your motor.

While the price of a policy is an important factor, don’t just settle on the cheapest option.

Make sure you read the terms and conditions of any policy carefully to check exactly what is covered, and what any excesses might be.

Buying a cheap car insurance policy with insufficient cover will end up costing you more in the long run, especially if you have to make a claim and find out you’re not protected.

The time of year that you buy car insurance can also have a big impact on the price you pay.

Research shows that February is the cheapest month for car insurance, while December is the most expensive month.

To help you find the best insurer, we’ve combined expert analysis of more than 30 standard car insurance policies along with feedback from thousands of policyholders to produce independent car insurance reviews.

For more tips and information, check out our car insurance advice guide.

Updated 22/8/2019 to correct cancellation fee charged by Swinton

Back to top
Back to top