The cost of car insurance in London is at a two-year high, edging closer towards the most expensive on record, according to new data published today.

Drivers in the region can now expect to pay as much as £1,260 for their car insurance, on average, following increases over the past year. 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.

In particular, motorists in Inner London saw the highest increase to their premiums, with prices rising by £91 (8%) over the past 12 months to £1,260, on average. This makes it the most expensive region in the UK for car insurance, with drivers paying at least £207 more than anywhere else in the UK.

Meanwhile, a £59 (6%) increase to prices in Outer London over the past year means drivers are now paying £1,021, on average. This is the first-time prices for drivers in the region have reached more than £1,000 since 2017.

Following these recent increases, the average price of car insurance in London is now nearing the most expensive on record. In fact, car insurance costs in Outer London are just £50(5%) off the highest price paid back in 2011, and £91 (7%) in Inner London. And if prices continue to rise at the current rate, drivers may be paying a new record by the end of the year.

On a more granular level, there are some postcode areas in the region where prices have in fact reached record highs. Motorists in Kingston upon Thames and Bromley are now paying the most expensive on record, with the average price of car insurance now at £787 and £883, respectively.

However, drivers in West Central London have been hit the hardest by the recent increases, as the average price of car insurance in the area has accelerated by a staggering £232 (20%) in the past three months alone, and £171 (14%) over the course of the year. This is not only the steepest annual increase seen by all areas of the UK but is also more than twice as high than anywhere else in the city, in terms of quarterly rises. Drivers in the area are now paying £1,371 for their car insurance, on average.

Although, this isn’t the most expensive price for car insurance in London. In fact, drivers in East London are paying an eye-watering £1,443 in comparison, on average.

These increases are mirrored across the UK, as the average price of car insurance has now reached £815 following a £41 (5%) increase over 12 months – the steepest rise in prices in two years. The data also shows the cost of car insurance has climbed by £32 (4%) in three months (Q4 2019), which is also the biggest quarterly increase in more than two years.

Following these recent increases, the average price of car insurance is now nearing the 2011 peak of £858, with UK motorists today paying just £43 (5%) less than this record price.

Looking back at the past 12 months, 2019 proved to be a volatile year, with car insurance prices fluctuating before delivering a powerful blow to drivers to close out the year. Now, drivers across the UK will no doubt feel deflated by the news of increases to their car insurance prices. And some will feel the pinch more so than others.

This past quarter (Q4 2019) saw prices ramp up for female UK drivers in particular, who are now paying £48 (7%) more than 12 months ago. This means they can now expect to pay £767 for their car insurance, on average. However, prices remain higher for men, who pay £854 in comparison, following a £37 (5%) increase year-on-year. This brings the gap between the two to £87, on average(2).

But it isn’t just women who are bearing the brunt of the increases. Some younger drivers have been hit with price hikes of more than £100. In particular, the cost of car insurance for 18-year-olds in the UK accelerated by £147 (7%) in 12 months to £2,130, on average. This is the most expensive price paid by any age group. Meanwhile, prices for 19-year-olds and 17-year-olds also increased by £137 (7%), and £116 (6%) respectively. This means 19-year-olds now pay £1,990, on average, while 17-year-olds follow shortly behind, with the average premium now £1,971.

However, the data shows that prices don’t always decrease with age, or experience. In fact, all drivers in their 20s faced among the steepest increases across all age groups. In particular, prices for 24-year-olds soared by £101 (9%) over the past 12 months, with drivers now paying £1,259, on average. In comparison, the smallest increase for drivers in this age group was £51 (3%) for 21-year-olds, which is still significantly higher than the UK average.

It seems these increases have no age barrier, as drivers later in life are still being hit price hikes. Last quarter, drivers aged 38 and 69 paid the most expensive price on record for these age groups. A £43 (7%) annual increase for 38-year-olds meant they are now paying £672, on average, while 69-year-olds saw their costs climb by £38 (9%) to £481, on average.

These recent increases have left drivers scratching their heads, as further research conducted by Confused.com(1) found more than a quarter (27%) of UK drivers are confused about why the cost of their insurance increases each year. And while some might believe staying loyal to your insurer will land you cheaper insurance premiums, the research proves this is certainly not the case. According to the research, more than half (53%) of drivers who received their renewal notice in the past three months (October – December 2019) said their price had increased by £52 year-on-year, on average. Although, worryingly, nearly half (47%) of these went on to renew with the same insurer, despite the price increase. More than a quarter (26%) of these drivers made the decision to stay because they didn’t feel the increase was very big.

Confused.com, is urging drivers to shop around, even if their renewal price hasn’t increased significantly, as there’s still the opportunity to make substantial savings. To further incentivise drivers to seek out a better deal, Confused.com is giving them the chance to save even more by guaranteeing to beat their car insurance renewal price, or give them the difference, plus £20(3).

Although, while car insurance prices are on the up, drivers are offered some respite in other motoring costs. The cost of fuel, in particular, has dropped slightly over the past six months. According to Confused.com’s fuel price index, the average price of petrol in the UK this month is 126p per litre, compared to 128p in July last year. Similarly, diesel costs have dropped slightly, with prices now 130p per litre, compared to 131p six months ago(4). 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.