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Martin Lewis has urged drivers to “fight back” against rising car insurance as car owners claim they are “being held to ransom” with astronomical quotes.
The MoneySavingExpert founder said car insurance is all about “the risk books of millions of drivers” who are “in different scenarios”.
It comes after the Independent exclusively revealed average premiums rose by 48 per cent on average in the 12 months to June 2023, according to data from the analyst Consumer Intelligence, which looks at quotes from Confused.com, Go Compare, Compare the Market and MoneySuperMarket.
According to Consumer Intelligence, those aged 25 to 39 and 65 and over have been hardest hit by car insurance rises, with average premiums jumping by more than 50 per cent. Drivers in Scotland and London have seen their premiums rise the most.
Have you been forced to sell your car because of soaring insurance costs? Email maryam.zakir-hussain@independent.co.uk
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‘This is ransom’
Andrea Klein, 60, said drivers are being “held to ransom” after seeing her insurance quote hike over 90 per cent.
“I’m a very savvy consumer and I know how to compare like for like,” the part-time carer from London told The Independent. “But there is no rhyme or reason for what insurance companies are doing.”
Ms Klein has had a no-claims bonus for over a decade on her 13-year-old Toyota Prius. Despite this, she has seen her rate double from £368.58 to £722 with 1st Central.
Some offers were as high as £2,000 on comparison websites, she said.
While the 60-year-old has considered whether she can afford to keep her car on the road, her job as a part-time carer means she relies heavily on her car.
“We’re paying taxes, fuel taxes, and we have no choice but to insure the car. We should at least be allowed to insure at market rate.”
As a recent divorcee, Ms Klein said the surge in her premium has hit hard.
“Trying to make ends meet has become more difficult now. At a time when I’m counting my pennies, I don’t have room for this in my budget,” she said.
‘A massive kick in the teeth’
Scott Young, from Welling, said his insurance renewal increased 69 per cent from £587 to £993.78 with Hastings Direct.
The 34-year-old drives a Toyota RAV4, 2018 plate, and his wife is an additional driver.
“We both work full-time and have six children between us,” he said. “This is a massive kick in the teeth for the hardworking in society.
“It really is ridiculous that insurance companies are able to charge this when insurance literally is a necessity if you own a car.”
John Williams echoed his frustration as he said his premiums for a 1.2 Micra (2009) went up from £150 to £420 with Saga despite having “no accidents or claims”.
“I don’t understand how car insurance companies can justify these massive increases,” he said, adding: “There is nowhere to turn to for help.”
What does Martin Lewis say?
Speaking on the BBC Sounds podcast, Mr Lewis said: “It’s all art, not science. It’s all trial and error,” as he encouraged car owners to try different combinations, provided they stay within the law.
The money mogul also said: “Timing is everything”.
“When you get your insurance quotes matters. How many days before your renewal is due has an impact on the price you will be quoted.”
Mr Lewis said the optimum time to get a quote is 21 days before your renewal is due, while the most expensive time is on the day of your renewal.
He explained: “What the insurer’s risk tables show is that the type of people who leave it to the last minute to get quotes on their insurance are at higher risk than the type of people who don’t.”
The MSE team gives nine tips on how to get cheaper quotes, from paying annually to checking if you can add a responsible driver to your policy.
You can listen to Mr Lewis’ podcast on BBC Sounds here, where he gives more advice on how to save money on car insurance quotes.
Toby van der Meer, CEO of Hastings Direct, said: “Unfortunately, car insurance prices are rising across the country as more people are driving and average claims costs are rapidly increasing.
“We would urge everyone to check the details of their renewal, including mileage and cover levels, and to make sure they’re happy with these and therefore not overpaying.”
Saga said: “In line with other insurers, we are experiencing high levels of claims inflation which, in turn has meant that premium and renewal prices have unfortunately had to rise too. This has been particularly apparent across the motor insurance market.
“To use car insurance as an example, material shortages have caused specific spare parts to become more expensive because of demand. Not only that, but they also take longer to arrive, which lengthens the duration whereby cars are out of action after a claim, and then extends the time (and therefore increases the cost) claimants need a courtesy car for.
“As reported by Trend-Tracker, industry data has revealed that we’re seeing “keys to keys” times double from circa 34 days to over 65 days, with no current signs of this decreasing in the near future”.
“Saga is fully supportive of, and compliant with, the market reforms introduced by the FCA last year. This means that our existing customers pay no more than new customers at renewal.”
A spokesperson for 1st Central said: “We work hard to keep the cost of car insurance as low as possible for our customers.
“There are many factors that determine the cost of insurance including individual circ*mstances, costs of repair, sourcing parts and the used car market. The insurance industry has seen substantial increases in these costs over recent months, which has fed through to higher average premiums across the sector.”
