Stock buying and adverting: insurance costs rising at record levels

The cost of car insurance continues to hit the headlines, with the average annual price in the UK hitting a record of £924, according to the latest index published by the price comparison website Confused.com. That is up by well over 50 per cent year on year.

Following on from one report on rising insurance costs, the website Compare the Market recently highlighted that while young drivers favour an automatic car over a manual one, many would be better off when it comes to their insurance to learn and choose to drive a manual car.

Younger drivers on automatic-only licences pay the highest of all car insurance premiums. In 2023, the typical automatic-only driver aged under 25 was quoted £2,803 a year for their car insurance,

Young drivers of cars with automatic gearboxes paid £490 more for cover than those with full licences in 2023 - but £760 more in 2024.

According to insurers, the rationale for higher premiums is that automatic gearboxes are more expensive to fix and because automatic cars cause more claims. 

The upward trajectory for car insurance is going to remain the same. In a recent letter to MPs, the Financial Conduct Authority said in a letter to MPs that "predictions show further increases in the year ahead."

While the cost of insurance has always been part of car buyers' decision-making process, the dramatic rises over the last year are something dealers should consider in their advertising and stock purchase approaches.

Chris Rowthorn, Motor Sales Operations Director