The average cost of annual car insurance premiums for drivers aged 55-64 leapt by 54% in the 12 months to December, according to new data from price comparison site Compare the Market.
This puts the average premium for this age group at £456, up from £297 in December 2022.
Car insurance increased by 52% on average across all age groups, with the average annual premium hitting £950, up from £624.
Drivers over 50 are still much better off than their younger counterparts – despite average increases between 55 and 57% for drivers aged between 45 and 79, these drivers still enjoy the lowest premiums by some margin.
The average driver in the 45-54 age range will have seen their premiums increase from £387 to £598. For the 55-64 age range, premiums are now £456 on average (up from £297) and for 65-79 year olds they’ve jumped to £428 (from £273).
It’s not great news for motorists of any age, but drivers under 30 still face the most eye-watering premiums. Despite an increase of 49% – a relatively low proportion compared to other age groups – the average driver under 24 will have seen a £655 12-month increase to a whopping £2,0002, meaning many over-50s will be over four times better off than their younger counterparts.
Compare cheap car insurance quotes
Car insurance renewal premiums have a habit of increasing every year, even if you haven’t made a claim. Compare car insurance quotes from over 110 UK providers – you could save up to £490* per year.
*51% of consumers could save £490.26 on their Car Insurance. The saving was calculated by comparing the cheapest price found with the average of the next four cheapest prices quoted by insurance providers on Seopa Ltd’s insurance comparison website. This is based on representative cost savings from June 2023 data. The savings you could achieve are dependent on your individual circumstances and how you selected your current insurance supplier.
The significant rise in the cost of car insurance may be partly due to a rise in the cost of claims for insurers, Compare the Market said. The rapid rise in inflation will have likely impacted many areas of the motor repair industry including the cost of spare parts, energy, and hiring specialist mechanics.
New rules introduced by the Financial Conduct Authority’s in January 2022 that ban insurers from offering different premiums to new and existing customers may also have ramped up prices. Some car insurance companies are finding loopholes that allow them to charge returning customers more than new ones for the same policy. Read more in our article Car insurance: why loyalty still doesn’t pay.
Julie Daniels, Motor Insurance Expert at Compare the Market, comments: “Many drivers will be worried about the substantial increase in the cost of their car insurance. Our research shows the typical premium now costs £950, with lots of younger motorists likely paying even more than this. As household bills continue to rise, it’s so important for drivers to take a few minutes to compare prices from different providers when their car insurance is up for renewal. It’s quick and simple to look at what deals are available and could help you save hundreds of pounds.”
How to reduce your over-50s car insurance premiums
If you’re worried about soaring car insurance premiums, it’s well worth shopping around for cover, even if your policy isn’t up for renewal yet. According to Confused.com, getting a quote between 21 and 30 days before your policy expires is usually the best idea, as you’ll pay much more if you leave it until the last minute. Find out more in our article When is the best time to renew car insurance?
There’s a good chance you might be able to reduce your car insurance premiums if you think you’re paying over the odds.
For example, believe it or not, the way you describe your job when you apply for car insurance can have a big impact on the amount you pay. Don’t be tempted to put down a different occupation to the one you actually do, as this could invalidate your cover, but when you next apply for cover it could be worth seeing if describing your job in a different way reduces your insurance premiums.
Paying for your cover up front rather than in monthly instalments can also save you money, so if you can afford to do this, it’s worth checking how much it could save you.
Read more about the different ways you can reduce costs in our articles 10 practical tips to reduce your car insurance premiums, and 16 cheapest cars to insure.
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