Bad news for Greater Manchester drivers as car insurance prices rise
There is bad news for drivers in Greater Manchester, as new data shows the average cost of car insurance has risen over the past 12 months.
However, research shows savvy drivers can combat these increases by shopping.
New figures reveal Manchester drivers now pay £ 1,005 for their car insurance, on average, after an increase of £ 41 (4%) in 12 months.
That’s according to Confused.com’s latest auto insurance price index, powered by Willis Towers Watson. Based on over six million quotes each quarter, it is the UK’s most comprehensive car insurance price index.
Oldham drivers have been hit the hardest by the increases, as the price of car insurance in the region has climbed £ 73 (7%) in 12 months. This means that drivers in this area can now expect to pay £ 1,164 for their car insurance, on average, making it the most expensive area outside of London.
These increases are mirrored across the UK, with figures showing the average car insurance price is now £ 783, following a £ 23 (3%) increase in the past year.
The data comes in the wake of an interim report from the Financial Conduct Authority (FCA), which exposes “double pricing” practices that inflate premiums for loyal customers who renew year after year, many of whom are vulnerable.
According to the FCA report, insurers are offering cheaper prices to new customers in order to win their market at the expense of higher prices for loyal customers. But if insurers are forced to balance the way they price customers, it could see prices for new customers rise even more. This is why Confused.com urges drivers to shop around for the cheapest price.
Evidence of this behavior was found in other research from Confused.com, which found that 43% of UK drivers who received their renewals in the last quarter (July to September) were charged £ 53 more, on average . Even if, worryingly, 38% continued to renew with the same insurer, despite the price increase. Most (94%) made the decision not to change on the grounds that the price increase was not significant.
Research has also shown that people stay loyal in the hope of being rewarded. However, this is clearly not the case. According to the study, drivers stay with their insurer for an average of three years. In fact, nearly one in ten (7%) admits to staying with their insurer for more than 10 years. But he also pointed out that the switch can save money, with those who shop on a price comparison website saving an average of £ 61.
But the FCA has raised concerns that consumers who choose to auto-renew with their current provider are paying higher prices for their insurance than they would if they were shopping. And insurers target those customers who are less likely to shop with higher prices. As a result, the FCA emphasized the need to shop around, saying that “many consumers who change or trade their premium can get a good deal.” And this applies even if the increase is only minimal.
Amanda Stretton, automotive editor at Confused.com, echoes the FCA’s findings and urges drivers to shop around because there’s a good chance another insurer might want your business.
The FCA is expected to release the full report in early 2020 and is exploring measures to shed more light on insurance pricing. But in the meantime, Confused.com is urging motorists to take matters into their own hands and shop around for a better price. To further incentivize drivers, the company is giving them the option to save even more by guaranteeing to beat their auto and home insurance renewals, or by giving them the difference, plus £ 20 (2).
As auto insurance prices start to increase year on year, drivers will see the difference in their renewal price, although some more than others. In particular, female drivers are bearing the brunt of the increases, having seen prices soar by £ 29 (4%) from 12 months ago. The average female driver can now expect to pay £ 737 for her car insurance, on average. However, it remains significantly cheaper than male drivers, who pay £ 821 by comparison, after an average price increase of £ 19 (2%) year over year. This brings the gap between the two to £ 84, on average (3).
Although it is not just female drivers who pay the largest increase. Younger drivers were hit hardest by the increases. In particular, prices for drivers aged 23 are now £ 45 (4%) more expensive than 12 months ago. This means that drivers of this age will now pay an average of £ 1,306 for their car insurance. Likewise, the average price for 19-year-olds increased by £ 42 (2%) in 12 months to reach £ 1,938. According to data, this is one of the most expensive ages for car insurance, surpassed only by 18-year-olds who pay £ 2,067 on average.
As auto insurance prices rise, drivers can breathe a sigh of relief as the spur of other auto costs begins to ease. Fuel, in particular, fell slightly after a sharp increase at the start of the year. Since May, the UK average gasoline price has fallen by 2p per liter, while diesel prices have fallen by 3p. Confused.com’s fuel price index shows that gasoline now costs 127.9 pence per liter and 131.5 pence for diesel (4). But if the prices are falling for the moment, these prices remain extremely high compared to the last years. And trends suggest that the cost of fuel may soon accelerate, leaving motorists with another costly burden.
Amanda Stretton, Automotive Editor at Confused.com, comments, “For drivers, purchasing auto insurance is a must. And it’s really disheartening to know that prices in Manchester and Merseyside are more expensive than at this time last year. And given recent auto insurance pricing surveys, the situation could only get worse if new measures mean insurers are raising prices for new customers.
“FCA has found that loyal customers are overvalued when renewing. But it really shouldn’t be. Customers should be rewarded for their loyalty.
“Until the FCA puts measures in place to protect consumers, we need to do everything we can to ensure that we are not paying more than we should for auto insurance.
“Always shop around, even if the price for your renewal is cheaper or the same. There will likely be another insurer who wants your business.