Car insurance costs are now at their highest ever on record, says a comparison site, which is warning drivers to brace themselves for premium increases of 40%.

Motorists are in for a ‘shock’ fears Confused.com as inflation, higher repair bills from mechanics and an increase in insurance claims post-Covid are all contributing to a significant increase in charges for cover.

Research into more than six million car insurance quotes from the last three months has found on average a driver will now need to pay £776 for their annual car insurance premium – £222 more than the cost of the same cover a year ago.

Prices, say experts, that are now a staggering 40% higher than they were 12 months ago – and above the pandemic peak of £630 - which risk making car insurance now one of the most expensive household bills people may have.

The news is also disappointing for young motorists – with drivers under the age of 20 now being asked for more than £2,000 a year on average to cover their early days on the road.

Reasons for the rise

As people have returned to normal driving habits since the pandemic, the number of car insurance claims has also risen steadily meaning that prices too have climbed quickly.

Alongside the frequency of claims firms are processing, the value of those claims has too increased – driven by rising inflation over the last 18 months that has put-up the cost of vehicle repairs meaning higher pay-outs are needed from insurers.

Car insurance expert Louise Thomas from Confused.com fears there will come a crunch point for many.

She said: “Car insurance has quickly become one of the biggest expenses for drivers. If prices continue at this rate then there’s no doubt drivers could be priced off the road as they battle with other rising costs too.”

While drivers aged 18 and 19 are now facing average bills of £2,494 and £2,097 respectively, older drivers will not avoid premium increases either, forewarns Confused.com.

Car owners around retirement age are still benefiting from the lowest prices of all age groups – now paying around £413 for their insurance each year – but this is still a 32% increase – or around £100 more – than they were being asked for a few months ago.

How to get the best deal?

Drivers are still able to save, insists the comparison website, if they are willing to spend the time shopping around.

Experts also advise checking the terms of any new policy, including mileage estimations and limits, to ensure all details remain accurate and up-to-date.

Louise Thomas added: “What we do know is that many drivers were able to save money when it came to renewal. And shopping around was the key to this.

“Although this isn’t all drivers can do to save money. We always advise drivers to look at the details of their policy and make sure they’re accurate before committing to a price. Updating your mileage or considering extra security could easily bring your policy down.”