Have Your Motor Insurance Premiums Gone Up?

On average, motor insurance was 25% more expensive in 2023 compared to 2022,¹ with the annual cost of many insurance policies increasing in some instances by £100 or more a year.² This increase has occurred for many vehicle owners, despite their circumstances remaining unchanged and not having made a recent claim. If this applies to you, find out what factors are influencing the rise in motor insurance premiums.

Car Repairs and Car Parts

The initial retail value, and repair costs of cars are being pushed up. If you have an accident and your car is a write-off, replacing it could cost a lot more. This is linked to the rising cost of materials and labour used to make cars and car parts, partially due to the impact on manufacturing from the invasion of Ukraine. Just like the cost of a property rebuild has increased, so too has the cost of car manufacturing. With soaring energy costs, and the cost of key components higher than they were during Covid-19, the vehicle production sector is facing a significant amount of financial pressure which is often passed on to the consumer.

Labour shortages

Brexit has led to labour shortages within the UK, which in turn has been partially responsible for supply chain issues. Between 2020 and 2022, the number of people from the EU working in the wholesale vehicle retail and repair sector dropped by 1.73%, and the workforce from non-EU countries fell by 0.46%. This meant that over 100,000 EU workers and 17,000 non-EU workers were lost to migration caused by Brexit, which has been a contributing factor in delayed production and repair costs.³

Increased Theft Rate

Vehicle thefts increased by 35% towards the end of 2023,⁴ with a car stolen every 8 minutes.⁵ This development has been linked to a range of influences and factors:

Economic Factors: The high cost of living linked to rising interest rates, inflation, and soaring energy costs can contribute to a rise in motor theft.

Technological Advancement: While advancements in technology often improve car security systems, criminals match technological progress by cloning keys and using advanced hacking techniques to bypass keyless entry systems.

Market Demand: Certain makes and models such as Ford Fiestas, Land Rovers, and Range Rovers are in high demand. The vehicles and their parts are sought after both in the UK and internationally, making them a target for organised criminal networks who steal cars and parts for resale on the black market.

Weather and Roads

Severe weather events such as floods and storms can cause accidents, and damage to vehicles, which can lead to a higher number of claims. Poor road conditions can also damage vehicles, and again lead to an increased number of claims, which can contribute to the higher cost of premiums as insurers battle to keep costs down and manage a higher number of payouts.

If the cost of your motor insurance has increased, talk to us. We’ll try to find cover that suits your budget and requirements, and make sure you and your vehicle are properly protected.

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Lloyd & Whyte® Ltd are authorised and regulated by the Financial Conduct Authority. Registered in England No. 03686765. Registered Office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA.

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