Millions of drivers can’t afford car insurance

Millions of drivers have been priced off the roads because they can’t afford the high insurance costs, new research finds.

With premiums now averaging £612 a year on average, as many as 2.6 million people have stopped driving.

Unaffordable premiums

Citizens Advice’s research shows:

• 900,000 more people can’t afford car insurance compared to last year.
• 3% of adults haven’t driven in over a year because insurance is too expensive.
• 2% had car insurance last year  cancelled it due to money issues.

Citizens Advice says this is just the beginning of a bigger problem as their figures show a hidden affordability crisis.

They warn rising premiums may lead to more uninsured drivers, impacting those with insurance.

Clare Moriarty, chief executive of Citizens Advice, points out that having a car is essential for many.

“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,” she said.

Who’s affected?

One in five drivers, about 7 million people, rely on borrowing money, cutting back on essentials, or missing bills to pay for insurance.

A quarter (25%) of those who get benefits have fallen behind on payments, compared to 11% of all drivers.

They also face nearly double the financial struggle to pay for insurance.

People of colour face even greater challenges paying £546 more, on average, than white drivers.

They’re also more likely to borrow money to cover insurance costs.

Tips for getting the best insurance price

You can save money on your insurance, whether you pay monthly or annually.

Here’s how:

Get quotes 26 days before your renewal date

This is when you’ll find the best prices.

Waiting longer can lead to higher costs, sometimes up to 55% more.

Don’t just accept auto-renewal

Check other insurers and use price comparison websites.

Also, look for insurers that not listed on those sites.

Don’t be afraid to negotiate

If your renewal quote isn’t what you hoped for, talk to your insurer.

Do some research first so you can mention better offers you’ve found elsewhere.

Pay your insurance in one go

It’s usually cheaper than paying monthly because you avoid interest.

If you can't pay it all at once, consider using an interest-free credit card, but make sure you can pay it off before any interest kicks in.

Add another driver

Adding a lower-risk driver to your policy can bring the costs down.

But don’t falsely list them as the main driver, as that’s insurance fraud.

Get a black box

These devices monitor your driving and can lead to lower premiums if you drive safely.

Be prepared to follow any rules, like curfews.

Be accurate with your mileage

Overestimating can make your premium higher and underestimating might invalidate your policy.

Check your job title

Sometimes, a small change can lower your premium, as some jobs are seen as riskier than others.

Just make sure it still accurately describes what you do.

Find out more tips on how to keep premiums low.