Almost three million motorists have stopped driving as they can’t afford car insurance, research finds.
This is due to a jump of 900,000 drivers who can’t keep up with the cost of premiums, Citizens Advice data shows.
Car insurance has skyrocketed by 40% since 2022, with the average prices surging by up to £812 per year. The price hikes among insurers have led to a fifth of motorists unable to afford the costs without cutting back on everyday essentials or borrowing money.
Younger drivers have always paid more than other motorists, but the levels 18-34-year-olds have to pay are double those of adults aged 35-54.
Paying monthly – labelled as a ‘poverty premium’ – has contributed to this, with premiums for those who can’t pay upfront for the year. A separate investigation from Which? found some monthly insurance customers were charged 40% APR each month to do so.
As well as younger drivers, non-white motorists also pay more, with an average of £546 added to their premiums each year, according to Citizens Advice.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
The escalating cost of car insurance has led to the Government creating a task force of industry experts from the charity, the Association of British Insurers (ABI) and Compare the Market to clamp down on spiralling costs.
The purpose of the group of experts is to investigate the factors that cause disproportionate prices for motorists. The group will look at inflation, rising car thefts and damage from potholes to see what dictates insurers’ prices.
Citizens Advice has called on the Government to take stronger action to halt the battle that drivers face to keep the car on the road.
‘Shocking number of people excluded’
Clare Moriarty, chief executive of Citizens Advice, said: “Car insurance is essential for so many people, whether the car is needed to commute to work, take children to school, or travelling to healthcare appointments.
“But a shocking number of people are being excluded from this market. We’re concerned a hidden affordability crisis is affecting millions of people.
“We welcome commitment by the Government to tackle this issue, but it’s crucial that nothing is left off the table. Bold action must be taken to tackle skyrocketing costs, including targeted support for those struggling most. We need a market that works for everyone, leaving unaffordable insurance premiums behind once and for all.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.