Car insurance costs are soaring in the UK, with 2.6 million people unable to afford coverage. Citizens Advice reports that many are cutting back on essentials, while some have stopped driving altogether due to rising premiums
Britons Trapped in a Car Insurance Nightmare as Costs Soar Over Past Year
By Djamila Lazri
Published on 10 December 2024 15:12
Car insurance costs in the UK are rising rapidly, leaving millions struggling to keep up with increasing premiums. The latest data from Citizens Advice paints a concerning picture, revealing not only the numbers, but also the complex reality behind them that affects daily life in significant ways. So, what’s driving these high insurance costs, and what solutions are being considered?
How Rising Car Insurance Costs Are Affecting Vulnerable Workers
The latest research by Citizens Advice reveals alarming figures, with 2.6 million people across the UK unable to afford car insurance. Over the past year, the number of people priced out has increased by 900,000. Around 3% of adults have stopped driving due to unaffordable premiums, while 2% no longer have coverage. Additionally, 25% of benefit recipients have fallen behind on payments, and a third have had to cut back on essentials to afford their insurance.
One example is a 21-year-old office administrator, who shared: “One hundred pounds a month might not sound like a lot to a lot of people, but I have to budget quite a lot in order to afford my car. It’s probably the most expensive thing I have to pay for.
I can’t really afford to buy luxuries like going for days out, because it takes such a big part of my pay. I want to go out with my car, but my car costs are stopping me from going out.”
The Association of British Insurers (ABI) has acknowledged the challenges many motorists face while pointing to external factors driving rising premiums. Below is a summary of their latest insights on the factors affecting car insurance costs:
| Factor | Impact |
|---|---|
| Labor shortages | Increased delays and higher costs for services. |
| Supply chain disruptions | Higher repair costs due to rising prices of parts. |
| Recent premium adjustments | Average premiums dropped 2% in Q3 2024. |
Citizens Advice Urges Immediate Intervention
Dame Clare Moriarty, Chief Executive of Citizens Advice, has called for urgent action to address the affordability crisis in the insurance market, especially for those who rely on their cars to get to work and access healthcare. She stated:
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. 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.
Her call for action stresses the need for systemic change to help those who rely on cars to access work, education, and medical care.