How much does UK car insurance cost?

How much does car insurance cost?

The average cost of car insurance in the UK was £456 between January and November 2022, according to our data.^[1]

That’s the equivalent of £38 a month, although interest will be added on top of this if you choose to pay monthly, so it’ll cost more overall.

But what’s surprising is that higher levels of cover are actually cheaper.

We found that the cheapest type of car insurance was comprehensive cover, which cost £454 on average.

You’d probably expect the most basic level of cover to be the cheapest, but the average cost of third party only insurance is £606 – 33% more expensive than comprehensive cover.

The average cost of third-party fire and theft cover was $557. That’s still 22% more expensive than comprehensive cover.

Cost of car insurance by age

Car insurance premiums are usually more expensive for younger drivers.

That might seem really unfair if you’re a careful driver and you’ve never been in an accident, but it’s because of how insurers use risk to calculate premiums.

Younger drivers are statistically more likely to be inexperienced drivers who make claims, so insurers will price your policy based on this overall risk. So even if you’ve never crashed your car or got a speeding ticket yourself, that overall risk for your age group will push up the price of your policy.

Comprehensive car insurance costs £905 on average for younger drivers. That drops by 65% to £313 for comprehensive cover when drivers are aged 50-plus.^*

Younger drivers probably won’t be able to make savings by choosing a lower level of cover either, as third party fire and theft and third party only cover were still more expensive for younger drivers.

^*The average cost of annual car insurance policies purchased through Gocompare between Jan to Nov 2022. Divided by cover level and age grouping.

These are just averages though. Your own premiums will depend on things like where you live, your age, your job and your driving history.

We’ll calculate your insurance premiums for you when you get quotes, so you can see whether you could pay less for a higher level of cover, like our average costs show.

The car insurance cost matrix

You can see here exactly how age and cover type are likely to affect your car insurance:

What affects the cost of car insurance?

Insurance providers take lots of different factors into account when calculating your car insurance premiums:

• Your age
• Your occupation
• Your address
• How long you’ve been driving
• Your driving history – including accidents and driving offences
• Your no-claims discount
• All of the above for any other named drivers you add to your policy
• The amount of voluntary excess you choose
• The make and model of your car
• Where you park your car overnight
• Your annual mileage

Insurers use all of this information to statistically assess your level of risk and calculate your premium accordingly.

It’s really important to compare quotes before you buy car insurance because each insurer will calculate this risk and price its premiums slightly differently – that’s why you get lots of different quotes at different prices.

Why has my car insurance gone up?

All of the ‘risk factors’ above are used to calculate your car insurance, so if anything changes – like increasing your annual mileage or moving house – this can affect the cost of your car insurance.

You need to tell your insurer straight away about some changes, like a change of address or job. And it might need to adjust your premium immediately to charge you more or give you a part-refund.

But for other changes, your insurer will only need you to tell it when you renew or take out a policy. Your insurance policy booklet will tell you when you need to let your insurer know about any changes.

But I haven’t changed anything

You might be wondering why your insurance cost has gone up at renewal time if your personal circumstances have stayed the same and you haven’t made a claim.

Sometimes insurers will increase prices in line with inflation and extra costs to the industry like fraud, which means your renewal cost will be higher.

That’s why it’s important to shop around and compare prices every year – the insurer that was cheapest for you a year ago might not be the cheapest any more.

Will the cost of my car insurance go up after an accident?

If you’ve had an accident and it was found to be your fault, your premiums are likely to be higher at renewal time.

Unless you protected your no-claims, you’ll have lost some or all of your no-claims discount. Insurers will also see you as an increased risk and will rise premiums accordingly.

But you might find that your insurance has gone up even if the accident wasn’t your fault and you didn’t make a claim.

That might seem unfair, but it’s because insurers will sometimes decide that a history of non-fault claims make you more at risk of making a fault claim in the future. Again, it’s all based on statistical risk.

If your insurance has shot up after a fault or non-fault claim, make sure you compare car insurance to see if you can find a better deal elsewhere.

You need to declare all fault and non-fault accidents and claims when you get quotes for car insurance or your policy could be invalid.

How can I get cheaper car insurance?

There are a few ways to legitimately cut the cost of your car insurance.

• Compare quotes for all levels of cover – remember, comprehensive insurance is often the cheapest, so you could pay less for more cover.
• Consider a black box policy – Telematics insurance can help young or inexperienced drivers get cheaper quotes by tracking their driving and proving they’re a lower risk on the road.
• Be accurate about your mileage – You should never lie about your annual mileage, but if you put in a mileage that’s too high you’ll pay more than you should. Use our mileage calculator to help you get it right.
• Build a no-claims discount – The more years you’ve been driving without incident, the higher your no-claims discount. But you’ll need to be the main driver to earn a discount on most policies.
• Add an experienced driver as a named driver - If a parent or friend with a good driving history sometimes drives your car, adding them as a named driver might bring down the cost of your policy. But don’t lie and say they’re the main driver, as that’s a type of fraud known as ‘fronting’.

Find out more ways to save money on your car insurance.

Is it cheaper to pay for car insurance annually or monthly?

It’s cheaper to pay for your insurance annually in a lump sum at the start.

If you choose to pay monthly, you enter into a credit agreement with the insurer and it’ll charge you interest. You’ll also be credit checked during your insurance application.

The interest rates can be higher than the APRs you see for credit cards which means they can add considerably to your insurance cost.

And the higher the cost of your policy, the higher the cost of the interest – so young drivers who already pay more for car insurance are affected even worse.

If you don’t have the cash to pay for your car insurance annually, consider whether a 0% credit card for purchases or even an interest-free overdraft would be a better option. You’ll still need to have the self-discipline to make monthly repayments and make sure you pay off the amount in full before any promotional 0% interest periods end.