Price increases across all sectors are affecting the vast majority of us, with 91% of adults reporting a noticeable increase in their cost of living. From our weekly shop and filling up our tank to clothing and utility bills, everything is noticeably more expensive to the point that foodbanks have seen an 81% increase across the UK as people are desperately trying to feed themselves and their families. It is estimated that overall prices have risen by 9.4%, the fastest increase in 40 years.
Price increases in the auto industry
Another increase we’ve seen is in the auto industry, with a 6% rise in car insurance over the last 12 months. Drivers are now paying roughly £550 per year to insure their vehicles, and it seems young drivers have been the hardest hit.
According to confused.com –
- Male drivers are paying on average £591 annually for insurance – about £34 more than they did they did last year
- Female drivers are paying on average £492, about £28 more than they did in 2021
- Younger drivers aged 18-24 are the hardest hit and are paying almost 3 x the national average
Why the price increase in insurance?
In 2021, we saw a prices fall each quarter for car insurance which was “possibly as a result of shifting driving habits during the Covid-19 pandemic. With more people working from home and fewer commuters, it makes sense that there might be fewer accidents,” explains confused.com.
The Association of British Insurers adds that the rising prices are the result of a range of ‘cost pressures’, including the rising average cost of claims, supply-chain issues and delays in getting replacement parts, second-hand cars becoming much more expensive, and of course, life returning to the pre-pandemic days of more cars on the road and therefore more accidents occurring.
Will prices continue to rise?
Sadly, it looks like the cost of insurance will continue to rise throughout 2022. Insurance broker WTW say they expect “bills to continue rising as companies pass on rising costs” combined with many more claims than the previous 2 years.
What can you do to save money?
Confused.com advises against automatically renewing your insurance, and instead, spending a little extra time shopping around for a better deal. “Even if your renewal is less than you thought, or is only slightly more than the previous year, there are still savings to be made,” says the cost comparison site. “The car insurance market is so competitive right now, which is the perfect time to be savvy and shop around for a better deal. Taking some time to research the best available options can really pay off. We know there’s an insurer out there who can offer you a better price.”
So, there you have it – shop around and you’ll probably find a way to save some cash on your insurance and hopefully by 2023, things will begin to stabilise once again. Although general prices are set to continue rising through the autumn, they will probably peak during the winter months. The Bank of England has predicted that the “current high rates of inflation are not likely to last.” Let’s hope they’re right.
