To think that car insurance has gotten to be a scam

[MaloneMeadow]

Tell me in what world is it reasonable that I’ve just paid £4500 for my (very sensible) DD’s first year of insurance, whilst DM’s 80 year old best friend is still tootling around with severe eyesight issues and dementia, having a near miss on a daily basis yet paying next to nothing insurance wise! Absolutely scandalous that the government are sitting back and allowing the horrendous price gouging currently going on with car insurance in the UK.

This is why new drivers need to base the vehicle they choose to buy on the insurance costs, fhe average group 1 car for a 17-19 year old costs £1,200 on average this year.

Car insurance companies are loss makers on premiums v payouts, without wise investment they would go bust very very quickly without significant price hikes for all policy holders.

I'll happily sit and listen to anyone slating this government, but this is bonkers.

Motor insurance is not profitable for the insurance companies.

They pay out more in claims than they are taking in premiums, look back up the thread, the facts have been posted more than once.

So, in fact, if anything, the government has effectively sat back and watched the motor insurance industry going bust.

Yet making more profit than ever before!

Bit like energy prices, we are told that Ukraine etc caused prices to rocket, yet the suppliers (not the exploration companies) are making more than ever, BG profits went up 10 fold to £772million.

Same with Supermarkets, all making massive profits.

Car parts haven't shot up in price and neither has the mechanics wages, in fact, having serviced our cars ourselves for many years, car parts have fallen back in price, my partner just ordered a full set of disc's and pads for our Skoda Octavia, from a named brand for £129, the car recently had 3 glow plugs fitted for £36, same with our DD's Citroen, parts cheap and readily available.

Insurance has just cottoned on to the fact we have to have it, therefore, like food, they can charge whatever they like, if they all wrack up the prices, where is the competition?

Avia General Insurance 1/2 year profits almost 500m

I'm a new driver as the UN suggests, 44 when I bought and insured the car September last year, 1.2 petrol and 11 years old. I don't have anywhere to park except on the road and use it for commuting and leisure and it's £1660 for the year. That does include the fees for the credit arrangement as well.
I had companies refused to even quote me, household name ones. I think my postcode is probably part of it as well and as obviously I'm unproven so they don't really know what risk I pose apart from statistics.
It's a lot of money every month, almost as much as paying for the car itself, but the loan for the car was a one off, I need fully comp as if it gets written off I can't afford to replace it.
I had a last ditch attempt at going for my licence because public transport had deteriorated to the point that staying employed was getting tricky.
All in all for lessons, tests, car and everything else it's set me back around £7k in 12 months, £4k of that is a loan and credit for the car itself & insurance and then things like repairs, tax and tyres.
I'd have happily stayed with public transport had it been an option!
I don't have anyone that I could use as a named driver or someone willing to put me on theirs for a while either, so I assume it's more expensive due to that as well. But ultimately if I want to keep my job then I have to keep finding the money, I've got no option.

I change insurers every year. I go online. Recently, multi-car seems to be more cost effective. We added DDs car last year, she was 20, and the price was roughly £1,500. We got discounts put through onto our two other cars though! DH and I are on all cars, DD obviously only on hers. No black box. Seems to spread the risk. DD's also got a refund when she switched to Uni address, that was a surprise. She has a Fist 500 1.2l. With LV so mainstream.

Slightly dreading this year now.......

Direct Line, Vitality and RSA have pulled out of car insurance altogether, because they were making a loss on it.

For smaller firms it is becoming an uneconomical business.

For larger ones, it's a loss leader they hope will attract customers to take out their other products. Admiral Multicover car + home insurance is an example.

And yet STILL no action has been taken to prevent the most likely of accidents - male under 25 drivers with 3+ people in the car.

Under 25s make up 25% of drink driving deaths.

Of the fatalities for under 25 drivers, 75% are male.

Most serious accidents happen at night.

It's about time that they introduced a rule about no more than two under 25s in a car after 10pm!

Or perhaps we change the way we teach driving. In some countries, drivers have to complete 2000 hours of driving with a parent before sitting a test (or so many hours with a professional instructor).

AND...

Don't forget all those EV cars on the roads that are increasing insurance premiums due to the cost of repair!

100% agree. My FIl has many scrapes on his car which he doesnt fix and in the next year or so he will probably give up but in the meantime he is on the road paying little in the way of premimums compared to some as he hasnt made any claims.

I have children in their mid 20's and despite NO accidents their insurance keeps going up and up. No feasible reason given although one current isnurance company did say there is a rising number of people driving without insurance.

Fully agree with this

Direct Line haven't pulled out of car insurance.

My husband just did his first year of driving.

He's 40 and has paid 3.5k 😑

We have 2 sons that just cnat afford to learn.

I think that's the enf game. More youths using public transport. Price them out of car ownership.

You sre quite right. I was thinking if More Than (RSA).

Zurich are also pulling out of personal lines car insurance, to concentrate on high net worth. Another minor player, but still another company exiting.

Was there really nothing cheaper than £4500? We got insurance for my 18yr old daughter a few days after she passed her test last year and it was £1200. Just renewed and it’s £800. She has an old C1 though

For us there wasn’t. I quoted a 10 year old polo before we bought the Mini - £8k for her first year!! Nearly fell off my seat!

Your insurance premium is a lot higher than for the young drivers I know. Have you looked into a black box?

The type of car really is the bottom line at the moment. I'm a new ish driver, I've had my lisence 18 months and when I looked at cars after I passed I had a lot of quotes of 2k+. But opted for a not entirely pleasant to look at basic tin can because I managed to get insurance for 700. Came down to 600 on renewal. I have friends all aged 25-35 with bigger or nicer cars who are really struggling this year with their renewals, one or two of them looking at 200+ per month, and that's with no claims discounts. It Is possible to get reasonably affordable insurance at the moment, but you have to be really careful what cars you look at

I past my test 20 years ago so don't really know much about young peoples insurance now ....
But is a (cheep) polo still popular first car? Surely there are more basic cars out there

A polo was my first car when I passed but (as far as i know) it was the basic smallest car vw produced... modern polo's are now the size of golf's and vw make a smaller car (fox?) Which was the equivalent of the polo then

I now drove a basic 10 y old corsa (less flashy than my polo) I'm sure a mini would cost me more to insure...(as did my beetle when I had it compared to the equivalent corsa) buti loved it as it was worth it for a few years... it's still cheeper for me to put my dad on my insurance (he lives a few hours away and doesn't ever drive it)!

Polos are still a very popular first car, at least where we are but they’re not cheap at all to insure anymore as insurance companies see them as ‘high risk’ due to the amount of new teen drivers who have them.

The VW Fox isn’t in production anymore and hasn’t been for many years. The smallest most basic car they make now is the Up

Definitely something needs doing.

I would say maybe an advanced driving course mandatory within 2 years of passing the actual test. Most people really benefit from being on a skid pan for example so that the experience is not new to them if it happens. Also stuff like what to do in an aquaplane situation.

Maybe people who have passed their test are not allowed to carry passengers for 2 years after.

There are loads of things you could come up with that would help.

Yet the AA is making profit and saw revenues & profits rise, following increases in premiums.

AXA doubled my insurance premium, AA pretty much charged me what i was paying previously.

How can this be if repair costs have risen so much??? AA don't do loss leaders and i'm not a AA member.

The issues with young drivers etc have always been there, nothing new.

It's ridiculous, my cousin (male, 18 yrs old), passed a few months ago - he's got a 2017 1ltr ford fiesta and he's had to pay £2800 (with a black box). Without the black box the cheapest he could get was £3970! I even found with mine last year my renewal shot up, managed to get it for the same price as the previous years luckily.

I think this is essentially the problem.

My DC quite likely wanted a fancier car, but they accounted for the insurance cost in their decisions around what they could afford.

DS1 (21) has his own small car, its 1.0 litre so a cheap insurance group. It also only costs £20 per year in road tax.

DS2 (19) and DD (17) have been added to the insurance for my small, 1.2 litre car as they aren't/won't be taking a car to university. I deliberately have a small car for this reason, they also learnt to drive in it. We have a bigger family car too, which DH drives day to day but I can also drive if one of the DC need mine.

Yes, insurance is expensive and has become more so recently. But there are choices that you can make to reduce the cost to some extent.

You really think that motor insurers have only just become aware that motor insurance is compulsory and so have increased premiums, don't be daft

How much did motor contribute to the Avia figure you've quoted?

That's not a surprise as I believe Fiestas are one of the most stolen cars and driven by the most inexperienced drivers

Read an interesting article in MoneyWeek explaining that most car insurers make money by investing your premium in stocks etc. Just insuring people loses money.