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Drivers watch out! Car insurance rates rise by more than 7%

Road trip. Father and son travelling together by car

It seems that household bills are constantly on the rise these days, with the rate of inflation going through the roof. Now, it appears that car owners may need to prepare their wallets for further cost increases. MoneySuperMarket has released new research that highlights average car insurance rates in the UK – and it’s far from good news for drivers!

Fully comp car insurance rates rose by 7% in Q4

New research from MoneySuperMarket reveals that the average fully comprehensive car insurance policy increased by 7.6% by the end of Q4. A quote that was £412.44 in Q3 was £443.67 in Q4 – a rise of £31.23.

While the price of car insurance is still 6.6% lower than it was last year, rates are certainly on the rise. In fact, the average price of car insurance has risen consecutively for the last three quarters.

Unsurprisingly, car owners in London pay the highest premiums in the UK. Those driving in the capital have an average bill of £616.65, which is more than double the premium paid by drivers in the South-West.

The largest quarterly price increase was seen in the East Midlands, with average premiums rising by 9.4%. The South-West was the only area in the UK in which car insurance rates decreased, dropping by about £2.30 in Q4.

How to save money on car insurance rates

Sara Newell, MoneySuperMarket’s car insurance expert, warns that insurance prices are on an upward trajectory. She advises drivers to stay on top of the rising prices and take advantage of methods that could lower their premiums.

With that in mind, here are five tips for saving money on your car insurance.

1. Shop around for cheaper car insurance rates

If your car insurance premiums are creeping up, it may be time to shop around for a new deal. Insurance providers will all offer different prices, and you may be able to find cheaper cover by looking elsewhere. A good idea is to use insurance comparison sites to compare prices and find the cheapest rate.

2. Reduce your insurance on unused vehicles

If you have insurance for more than one vehicle, you could consider reducing the cover that you have on the least-used car. While this may seem risky, the money that you save could make up for the rising cost of cover for your main vehicle.

3. Take advantage of low mileage discounts

Certain insurance providers offer discounts to drivers who do not exceed a set number of miles each year. If you tend to stay within your local area and perhaps drives less than the average car owner, it might be worth checking whether your provider offers this.

4. Keep claims to a minimum

Claiming on your car insurance could increase your premium. This is because companies see recent claims as evidence of careless driving. Therefore, you should try to avoid claiming on your insurance unless it is absolutely necessary. This means that you should only claim for large expenses that you cannot otherwise afford.

5. Pay annually

Paying annually for car insurance usually works out cheaper than paying monthly. If you’re struggling to keep on top of monthly payments, this could be a great option to consider. Furthermore, paying yearly will reduce the number of bills that you need to manage each month, which could take some financial stress off of your shoulders.

The post Drivers watch out! Car insurance rates rise by more than 7% appeared first on The Motley Fool UK.

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