Car insurance costs hundreds of pounds more for drivers living in deprived areas

16 October 2024, 07:11 | Updated: 16 October 2024, 09:19

Car insurance is costing hundreds of pounds more for drivers living in deprived areas, LBC can reveal.

Analysis for LBC reveals that residents in less well-off areas can pay almost a third more than neighbours in wealthier areas less than a mile away.

In one of ten examples shared with LBC, drivers in one of the most deprived areas of Manchester pay from £1,218 while those down the road receive quotes from £843. In a less deprived part of Newcastle residents are offered deals under £700 while just over a mile away in a more deprived district residents pay just over £800.

The Transport Secretary Louise Haigh told LBC that “some groups have been hit harder than others”. 

She added: “No matter your background or circumstance, this Government is determined to ensure drivers get a fair deal, this Government is determined to ensure drivers get a fair deal.”

In the last year car insurance costs in the UK have risen 12 times as fast as France, and about 5 times as fast as Spain and Italy. This, according to the Department for Transport, has been driven by damage from pothole-ridden roads, soaring inflation and rising car thefts, amongst other facts.

It is estimated that 1 million people cancelled their car insurance due to cost-of-living pressures in 2022.

While car insurance costs for UK customers rose on average by 25% from 2022 to 2023, average premiums rose by 6% in Italy, 5% in Spain and 2% in France in the same period.

In Germany, the biggest European car market, car premiums have risen by around 11 to 13% – a larger increase than in its European neighbours but still far short of the rises imposed on British drivers.

This analysis for LBC comes as the Government announces a new task force which will identify the factors behind rapidly rising premiums and will agree to solutions to keep costs under control.

This task force will include Transport Secretary, Louise Haigh, and Economic Secretary, Tulip Siddiq, will bring together industry groups and consumer champions such as the Association of British Insurers, Citizens Advice, Which? and Compare the Market, as well as insurance regulators.

Ms Haigh told LBC: “Car insurance is an essential for millions up and down the country. 

“It’s not just a legal requirement, but something that protects all of us on the road. 

“Yet, in recent years, millions of responsible drivers have seen a hike in premiums far outstripping rises seen in other countries.” 

She added: “Our new expert taskforce is a major step forward in delivering a fair deal for drivers.

“It will give this issue the attention it deserves – rooting out the factors driving up costs for industry, and ensuring drivers are able to hit the road.”