What is the cost of auto insurance?

What is the average cost of auto insurance?

Car insurance is a required necessity if you own a car. The amount you pay for automobile insurance, on the other hand, is determined by several criteria, including your age, driving experience, and vehicle type. 

There are, fortunately, ways to keep these expenditures low.

What is the cost of auto insurance
What is the cost of auto insurance

What is the average cost of auto insurance in the United Kingdom?

The average annual cost of comprehensive automobile insurance in the United Kingdom is £430. Data for the second quarter of 2021 from the Association of British Insurers. 

According to a Statista survey, the cost for drivers under the age of 25 might be as much as £851 per year. Premiums for over-50s with clean histories, on the other hand, might be significantly reduced.

What factors affect the price of auto insurance?

The cost of automobile insurance is influenced by your circumstances, your vehicle, and the policy you select. We've broken down the major areas below, and if you want to brush up on your knowledge, check out our in-depth guide on calculating auto insurance prices.

What is the cost of auto insurance?
What is the cost of auto insurance?

Information about the driver

To estimate how much you'll pay for automobile insurance, insurers will need to know the following information about the primary driver:

  • Age. Car insurance is often more expensive for young drivers under the age of 25, as well as the elderly. Drivers under the age of 25 are statistically more likely to get in an accident and file a claim, thus they often pay a higher premium. Insurers fear that drivers over the age of 70 may have slower reflexes or have medical issues that would increase the likelihood of an accident, so they charge higher rates.
  • Experience behind the wheel. Due to their lack of expertise, learner drivers often pay more, compounding the effect of age on rates.
  • Occupation. Professional drivers, whether in a racing car or a delivery van, may expect considerably higher insurance costs due to their increased time on the road.
  • Relationship status. According to studies, single persons are more likely than married people to be involved in an automobile accident. If you marry, your insurance premiums may drop immediately.
  • Location. Some locations are more vulnerable to theft, vandalism, and other possible threats, resulting in increased expenditures. Drivers in cities are more likely to be involved in an accident than those who live in the countryside.
  • Histories of claims The higher your premiums are, the more vehicle insurance claims you have made in the past.
  • Driving history. The more traffic violations you have, the more you may expect to spend on vehicle insurance. If you've been caught speeding or driving while intoxicated, your insurer is likely to boost your rates as a result.
  • Other motorists. Only a few people will be allowed to drive your automobile, and each one has an impact on the price. If you're a seasoned driver who adds your less experienced son to your insurance, your rates are likely to climb.
  • Common driving practices. Your average driving distance, how frequently you get behind the wheel, and where you drive all factor into your vehicle insurance rates.

The type of vehicle

When determining your premiums, insurers will also consider the sort of vehicle you drive.

  • Manufacturer. In general, cars from well-known manufacturers with large service networks are less expensive to insure.
  • Year, make, and model are all important. The availability of spare parts and certified mechanics are important variables in deciding the cost of automobile repairs and, as a result, car insurance rates.
  • Car safety is important. Car micro dotting, immobilizers, alarms, and other anti-theft devices reduce overall risk and can result in cheaper insurance premiums from some insurers.
  • Automobile security. The cheaper it is to ensure an automobile that is safer for its drivers and passengers.
  • The possibility of theft. Because of their style or because they are easier to resell, some cars are much more likely to be stolen than others. An automobile that is in great demand will usually command a higher premium.
  • It's retained at this location. The cost of insurance is affected by whether a car is stored in a locked garage or on the street in a high-crime area.
  • Consider investing in aftermarket security. You can still add aftermarket security systems if your automobile didn't come with them when you bought it. For example, VIN etching is quite inexpensive but can make a significant impact. Keep in mind that not all insurance will cover all security systems, so double-check ahead of time. 
  • Consider a large vehicle. Larger automobiles are frequently safer for their drivers because they usually come out on top in collisions with smaller vehicles. This can result in lower premiums, but it may not always be worth the investment.
  • Purchase a well-known model. The more well-known your vehicle is, the less you'll have to spend on insurance.

What kind of auto insurance coverage are you looking for?

Every motorist in the UK is obliged by law to carry at least third-party-only vehicle insurance, however, the price you pay may vary based on the additional coverage you require.

  • Coverage types. You might think that completely comprehensive coverage is more expensive than third-party coverage since it offers more protection, but this isn't necessarily the case. To be sure you're receiving the best bargain, compare comprehensive car insurance to third-party car insurance.
  • Excess. The excess is the amount you must pay before filing a claim on your automobile insurance. A bigger excess will typically result in cheaper rates, whilst a lesser excess would result in higher premiums.
  • A cover is an option. Additional coverage options, including breakdown coverage or the use of a courtesy car, are available on most plans. Some policies will come with them as standard, while others will require you to pay an additional fee to add them.

How can I save money on auto insurance?

You may save money by controlling the elements that influence your auto insurance rates as much as possible, and you can save even more by following this helpful advice. There are ways to save a lot of money on auto insurance because the cost varies so much.

  • Take an advanced driving course: Programs like the Pass Plus program and IAM RoadSmart can help you improve your driving abilities while also lowering your vehicle insurance prices.
  • Parking should be done with caution. Instead of leaving your automobile parked on the street, park it on a driveway or in a garage if possible.
  • Consider making a trade. You may be in the market for a new vehicle soon, so factoring in the cost of insurance is a smart idea. Every automobile on the market is classified into one of 50 insurance categories, with the lower the number, the less it costs to insure. Before you acquire an automobile, be sure you know which group it belongs to.
  • Pay every year. If you can, pay for your auto insurance in one lump sum each year rather than in monthly installments, which can be more expensive. If you can't afford to pay in full right away, try utilizing a 0% purchase credit card to spread your payments out over several months and avoid paying interest.
  • Renewal is a great place to shop. At renewal, don't just accept your insurer's quote. Instead, evaluate your coverage to determine whether you may save money by switching auto insurance.
  • Make changes to your preferences. Renewal time also allows you to make changes to your policy choices, like extras and excess, which might save you money.
  • Look for bargains. In the long run, don't underestimate the power of discounts. Look for savings for having a car security system, multi-policy discounts with existing insurers, and big no-claim incentives for good drivers.
  • Reduce your mileage: In general, the fewer miles you drive each year, the lower your auto insurance premium will be. If you just drive once in a while, pay-as-you-go vehicle insurance can be a good option.
  • Make the most of your no-claims bonus. Before filing a claim on your auto insurance, think twice. If it's only for a little sum, it might not be worth it because you'll have to pay the excess and risk losing your no-claims bonus.

Why is auto insurance so costly in the United Kingdom?

There are a lot of reasons why auto insurance in the UK is so costly, but the high cost of claims and the fact that many claims are false is the most significant. According to the ABI, insurers discovered a total of 107,000 fraudulent insurance claims totaling £1.2 billion in 2019. Surprisingly, a false claim is uncovered every five minutes.

According to the ABI, more than 1,500 whiplash claims are filed in the UK every day, costing the insurance sector over £2 billion a year and adding £90 to the typical auto insurance premium. Motorists' rates are also being pushed up by referral fees. After an accident, vehicle insurance companies sell personal information to personal injury attorneys, increasing compensation claims.

In addition, there are over one million uninsured motorists on the highways of the United Kingdom. This raises the cost of insurance for all insured drivers since the insurance company must pay the costs of injuries and property damage to others as a result of an accident.

What factors go into determining the average cost of vehicle insurance?

The ABI estimates the average cost of automobile insurance by combining data from many insurers and focusing on the price people pay for their coverage rather than the price they are quoted.

However, the amount you pay as an individual is determined by a variety of criteria, including your age, driving experience, the car you drive, the expected cost of repairs, and whether you have ever filed a claim on your insurance.

In conclusion

Car insurance rates have dropped to their lowest levels in four years, thanks to fewer people driving during the COVID-19 shutdown and fewer claims as a result. This is fantastic news for drivers, but you should still shop about at renewal to see if you can save money by moving to a different car insurance carrier and getting a better offer.

Keep in mind that the cheapest option isn't always the best; instead, seek to discover which insurer can provide you with the most value for your situation.

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