Thousands more people have been priced out of the car insurance market over the past year, according to estimates from Citizens Advice.

The charity estimates from research it commissioned that around 2.6 million people across the UK do not drive as they cannot afford the cost of cover.

Its research also indicates that the number of people priced out of the car insurance market jumped by 900,000 in the past 12 months.

The calculations were made following a survey of more than 6,000 people across the UK by Walnut Unlimited in September and October, for the charity.

Researchers estimated that those adults who have not been driving for at least a year because they cannot afford the cost of motor insurance account for about 3% of adults.

A shocking number of people are being excluded from this market

Those who have had motor cover in the past 12 months but no longer have it due to affordability concerns were estimated to account for around 2% of drivers.

The research indicated that a quarter (25%) of people receiving benefits have fallen behind on their car insurance payments in the past year and a third (33%) in this group have had to borrow, cut back on essentials or fall behind on other bills in the past year to pay their car insurance.

The charity quoted a 21-year-old office administrator who pays around £100 per month for her cover and relies on her car to get to work.

She told the charity: “One hundred pounds a month might not sound like a lot to a lot of people but I have to budget quite a lot in order to afford my car. It’s probably the most expensive thing I have to pay for.

“When you’ve got rent and bills to pay as well, it adds up. I pay my insurance monthly which is a bit more expensive but I could never afford to do it annually.

“I can’t really afford to buy luxuries like going for days out, because it takes such a big part of my pay. I want to go out with my car, but my car costs are stopping me from going out.”

Dame Clare Moriarty, chief executive of Citizens Advice, said: “Car insurance is essential for so many people, whether the car is needed to commute to work, take children to school, or travelling to healthcare appointments.

“But a shocking number of people are being excluded from this market.”

She added: “Bold action must be taken to tackle skyrocketing costs, including targeted support for those struggling most. We need a market that works for everyone, leaving unaffordable insurance premiums behind once and for all.”

An ABI spokesperson said: “Insurers understand how vital driving is for everyday life, and want to do all they can to support motorists. Over the past 12 months, motor insurers have paid out £11.3 billion in claims, and continue to face significant cost pressures from labour shortages, parts delays and broader price inflation. However, our latest data shows that the average cost of motor insurance dropped by 2% in the third quarter of this year, which follows a 2% drop in (the second quarter of) 2024.

“The industry is determined to keep motor insurance as competitively-priced as possible. Our 10-point road-map sets out steps that the industry and Government can take to tackle insurance costs for all drivers, and we’re also committed to playing our part in supporting the Government’s motor insurance taskforce.”

The ABI said it considers a wide range of risk-related factors when calculating the price of a car insurance policy, commonly including age, driver experience and the type of vehicle.

According to the ABI’s figures, the average price paid between July to September for annual motor insurance was £612, which was £50 (9%) higher than the same period in 2023.