- Motorists in Scotland can now expect to pay £643 for car insurance, on average –
There is bad news for drivers in Scotland as new data reveals the average cost of car insurance in the region has increased in the past 12 months. However, further research proves savvy drivers can combat these rises by shopping around.
New figures reveal the average price of car insurance in Scotland is now £643, following a £19 (3%) increase in 12 months.
That’s according to Confused.com’s latest car insurance price index, powered by Willis Towers Watson. Based on more than six million quotes every quarter, it’s the most comprehensive car insurance price index in the UK.
According to the figures, motorists in Central Scotland have been hit hardest by the price increases. The cost of car insurance in the region has climbed by £32 (5%) over the past 12 months, meaning drivers can now expect to pay £679, on average – the highest price of all Scottish regions.
Car insurance costs in other regions are also on the up, with both the Highlands and Islands, and East and North East Scotland both seeing a £7 (1%) rise in prices year-on-year. This means drivers in these regions are now paying £623 and £597, respectively, on average.
Meanwhile, the Scottish Borders was the only region in the UK to see a slight drop in prices over the year, with car insurance costs now a mere -£5 cheaper than 12 months ago. Drivers in this region are now paying £581 for their car insurance, on average.
The data is released following an interim report by the Financial Conduct Authority (FCA), which exposes ‘dual pricing’ practices which inflate premiums for loyal customers who renew year-after-year, many of whom are vulnerable.
According to the FCA’s interim report, insurers are offering cheaper prices to new customers in order to win their business at the expense of bumping up prices for loyal customers. But if insurers are forced to balance out the way they price customers, this could see prices for new customers increase even further. This is why Confused.com is urging drivers to shop around to find the cheapest price.
Evidence of this behaviour was found in further research by Confused.com, which reveals 42% of drivers in Scotland saw their renewal price increase by £41 compared to the previous year, on average.
The research also showed that people stay loyal with the hope that they will be rewarded. However, this is clearly not the case. According to the research, drivers in Scotland stay with their insurer for three years, on average.
In fact, nearly one in 10 (7%) admit they stay with their insurer for more than 10 years. But it also highlighted that switching can save, with those shopping with a price comparison website saving £49, on average.
But the FCA has raised concerns that consumers who choose to automatically renew with their current provider are paying higher prices for their insurance than they would if they shopped around – and insurers are targeting these customers who are less likely to shop around with higher prices.
As a result, the FCA highlighted the need to shop around, stating “many consumers who switch or negotiate their premium can get a good deal”. And this applies even if the increase is only minimal.
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 measures into their own hands and shop around to seek out a better price. To further incentivise drivers, the company is giving them the chance to save even more by guaranteeing to beat their car insurance renewal, or give them the difference, plus £20.
Overall, it isn’t just Scotland where prices are increasing. In fact, the average price of car insurance in the UK increased by £23 (3%) over the past year, meaning the average premium now costs £783. This is the second consecutive quarter where prices are more expensive than the previous 12 months.
As car insurance prices start to ramp up, drivers in Scotland will be feeling the pinch when shopping around. Although, some more so than others. In particular, car insurance costs increased the most for female drivers in Central Scotland, with prices now £38 (6%) more than 12 months ago. This is more than the overall average for Scotland. Female drivers in this area now pay £648, on average, compared to the £704 paid by men in the same region.
Although, hit the hardest is female drivers in Central Scotland aged between 26 and 35 and 61 and 65, who can now expect to pay the most expensive prices on record. Those aged between 26 and 30 were hit with the biggest increase of £43 (7%), taking prices to £650, on average.
Meanwhile, a £31 (6%) increase for those aged 31 and 35 took the average price to £514. But, even though those in their early 60s are paying the most ever, this is still a mere £320, following a £23 (8%) increase in 12 months, on average.
Looking to local areas in Scotland, Motherwell in Central Scotland saw the steepest increase, with prices now £52 (8%) more expensive than 12 months ago. This means drivers in the area can now expect to pay £702 for car insurance, on average. Although, this isn’t the most expensive area in Scotland for car insurance premiums, as Glasgow tops the list at £734.
Although very expensive, these prices may be welcomed by some drivers, particularly when they are paying upwards of £2,000. And this is the case for 17 to 20-year-old male drivers in Central Scotland, who pay an eye-watering £2,090, on average.
Similarly, male drivers of the same age in the Scottish Highlands and Islands pay slightly less, with the average premium priced at £1,941. Meanwhile, the highest price paid by a female driver is £1,505 for those aged 17-20 in Central Scotland.
But on the other end of the scale, 66 to 70-year-old female drivers in the Scottish Highlands and Islands are paying just a fraction of this price, with the average premium just £267. However, this is still more expensive than 12 months ago.
While car insurance prices are on the up, drivers in Scotland can breathe a sigh of relief as the sting of other motoring costs starts to ease. In the past 12 months, the average price of petrol in the region has dropped by 3.1p per litre, while diesel prices slump by 1.8p.
Confused.com’s fuel price index shows that petrol now costs 128.8p per litre, and 133.1p for diesel. But while prices are dropping for now, these prices are still extremely high in comparison to recent years – and trends suggest the cost of fuel could soon accelerate, leaving motorists with another expensive burden.
Amanda Stretton, motoring editor at Confused.com, comments: “For drivers, buying car insurance is a must. And it’s really disheartening for drivers in Scotland to know that prices are going up over the year. And given recent investigations into car insurance pricing, the situation could only get worse if new measures mean insurers ramp up the price for new customers.
“The FCA has found that loyal customers are being over-priced at renewal. But this really shouldn’t be the case. Customers should be rewarded for their loyalty.
“Until the FCA puts measures into place to protect consumers, we need to be doing all we can to make sure we’re not paying more than we should for car insurance.
“Always shop around, even if your renewal price is cheaper or the same. It’s likely there will be another insurer who wants your business.
“At Confused.com, we’re so certain drivers will be able to find a better price than their current insurer, that we’re guaranteeing to beat their renewal quote, or give them the difference, plus £20. Our price promise has already saved customers thousands of pounds.
“Please don’t pay more than you have to – take a few minutes to check your renewal letter and get a cheaper price.”
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