Car insurance premiums are back on the rise after the coronavirus pandemic, according to new figures from a leading price comparison site. Data from CompareTheMarket.com suggests a five percent rise in premiums during April 2021, bringing the average to £635 – up £33 from the previous month.
The news comes after months of price drops amid the coronavirus pandemic. With drivers staying at home and road traffic decreased, there has been a drop in the number of accidents. As a result, insurance premiums have fallen to record lows. According to earlier figures from CompareTheMarket.com, premiums fell by a record £55 over winter.
And although the latest data suggests some of that reduction has been wiped out in April, the relaxation of coronavirus restrictions has not completely negated the saving for consumers. With an average premium of £635, insurance is still cheaper than it was a year ago. During April 2020, the figures showed the average premiums was £44 (six percent) more expensive than it was last month.
Dan Hutson, the head of motor insurance at CompareTheMarket.com, said the winter is traditionally the cheapest time of year for insurance, with prices bouncing back in the spring. Hutson also warned that rises could continue as coronavirus restrictions are lifted, bringing an increase in traffic and an increase in premiums as a result.
“This winter saw exceptionally low car insurance premiums due to the impact of travel restrictions and fewer cars on the road as a result of the pandemic,” he said. “Premiums typically increase slightly in spring and last month we saw a 5% increase - the first uplift in the cost of car insurance since December.
“Although premiums are still £44 cheaper than last year, as more restrictions are lifted in the coming months, we could see the increase in premiums accelerate. Higher premiums as we come out of lockdown will be particularly difficult for young drivers, who typically face the steepest insurance costs.
“Young drivers have seen the cost of insurance rise by more than £50 month-on-month to £1,084. This substantial cost could potentially discourage many young people from learning to drive when lessons have only recently been permitted again. The most effective way for drivers to offset this rise in the cost of car insurance is to shop around for a cheaper deal when their policy comes up for renewal. Premiums can also be substantially cheaper by changing insurance provider three weeks before the end of a policy compared to the day of renewal, so it’s best not to leave it until the last minute to sort your new policy.”