Car insurance costs: Drivers over 50 faced biggest hikes this year

Drivers over the age of 50 have experienced the steepest increases in auto insurance premiums in the past year, according to new findings.

The average car insurance premium for a driver aged between 50 and 64 was £320 last month, which is £45 or 16 per cent higher than the same month a year ago.

For drivers aged between 65 and 80, average annual premiums have increased by 16 per cent or £39 year-on-year to £274.

Meanwhile, drivers over the age of 80 have seen premiums rise by 18 percent or £66 to an average of £435, according to Comparethemarket.

While all age groups have seen car insurance costs rise over the past year, the over-50s have been hit the hardest and are more likely to auto-renew their policy than shop around and switch providers, according to Comparethemarket.

Since January 1, insurers are prohibited from charging customers a higher price for renewing their car or home insurance than they would pay if they were a new customer.

While this rule remains in place, auto insurance premiums have increased across the board. The overall average premium across all age groups rose 14 per cent year-on-year, or £76, to £629 in November.

The increases are due to insurers “passing on the increased cost of claims to their customers,” according to Comparethemarket.

It added: “The cost of auto insurance claims has risen due to an increase in used car values ​​and higher auto repair costs.”

The Association of British Insurers has been warning for months that increasing pressure on the industry to absorb higher costs would ultimately result in higher prices for consumers.

Premiums: a table of premium increases for car insurance for the over-50s in the past year

Variations: Average auto insurance premium by area, according to Comparethemarket

Greater London drivers have endured the biggest spike in car insurance premiums in the past 12 months. The average premium in the capital is up by a whopping £137 or 17 per cent in the year to November.

At the other end of the spectrum, motorists in the South West of England have seen the smallest increase in motor insurance premiums. In the South West, average premiums rose by 9 per cent or £37 to an average of £458.

The West Midlands also saw a relatively modest increase in motor insurance premiums, which had risen by £46 in the year to November, bringing the average cost to £519.

Julie Daniels, auto insurance expert at Comparethemarket, said: ‘Motorists will be concerned that the cost of auto insurance is rising, especially when household finances are already under strain.

Our research shows that the average car premium has increased by 14 percent year-on-year.

‘For the over-50s, however, the costs of car insurance are rising faster.

“This could mean that these motorists end up paying much more than they need to for car insurance, because they are also less likely to switch insurers.”

According to Comparethemarket, drivers can save around £328 by shopping around for their car insurance.

Daniels said, “Our numbers show that loyalty doesn’t pay. By shopping around, drivers can save hundreds of dollars when their policy expires. Now more than ever, we encourage everyone to see if they can save money by switching.”

Earlier this month, the Financial Conduct Authority said it believed some insurers were rip off customers by undervaluing cars and other items when handling claims.

The FCA said it had seen evidence that some people who left with written-off cars were offered a price by their insurer that was less than the vehicle’s fair market value.

In some cases, only a complaint leads to a higher bid, according to the regulator. Offering a price lower than fair market value is not allowed under FCA rules.