How much is car insurance a month UK?
How much do you pay for your car insurance at the moment? How about your sister, your best mate, or mum? Chances are, the answers to these questions are pretty wide-ranging, and possibly a little confusing. So, what is the answer – just how much does car insurance cost in the UK, on average?
Average monthly car insurance costs in the UK
Let's get straight into it and answer the key question – how much is car insurance a month in the UK?
In 2021, the average monthly car insurance cost in the UK was just under £44.
There we have it – a nice simple answer. But actually, it's not quite so simple. Here are a few more key details to bear in mind:
- The figure is based on an annual average of £526 – costs are likely to be different if you pay for your insurance on a monthly plan.
- This is an average for all types of insurance – different plans carry wildly different average costs.
- There are lots of factors involved in calculating the price of car insurance, such as driver age and insurance excess, among other things – average monthly costs are useful to understand, but they're not the be-all and end-all.
Big variations in monthly costs
One of the major factors that influence how much car insurance costs is the age of the driver. Generally speaking, younger drivers find themselves paying more than drivers in higher age brackets.
It's often said that car insurance starts to go down significantly at 25 in the UK, but is this really the case? Well, yes, it is – 26-year-olds certainly paid less on average than 24-year-olds – but this doesn't quite tell the whole story. 24-year-olds generally paid less than 23-year-olds, 23-year-olds less than 22, and so on. For some types of insurance, like comprehensive insurance, the rate of price decline even slowed a little after 25 – although older drivers still found themselves paying less than younger drivers on average.
Paying car insurance on a monthly basis
Can you pay car insurance monthly in the UK? Yes, you can, but there are a few things to bear in mind.
Paying your car insurance premiums monthly can be an attractive option because it breaks down a huge lump sum into a handy and manageable set of payments, making it easier to manage your finances.
However, when paying for car insurance monthly, you might end up paying more in total than if you paid annually. This is because some insurance providers charge interest on monthly payments. So it's all about weighing up your options and deciding what works best for your personal circumstances.
Cancelling monthly policies
With lots of insurance providers, if you decide to pay monthly for your car insurance, the full policy term is still likely to be 12 months. So what happens if you want to change policies, or what if you want to end your cover altogether – can you cancel your car insurance if you are paying monthly?
Yes, you most likely can. While your insurance provider will be hoping that you see out the full term of cover, they won't be able to stop you if you wish to cancel. Though you'll need to bear in mind that many insurers charge cancellation fees.
There might be other things to consider if you do decide to cancel. For instance, your car will probably still need to be insured, unless you aren't planning to drive the car, and register your car as Statutory Off Road Notification (SORN) to the DVLA. Unless you take this step, the vehicle will need the legal minimum coverage – even if it's just sat on your drive or in your garage!
Pay as you go car insurance
You might remember pay as you go phones, from back in the day before anyone had a regular contract, and pay as you go car insurance works in a similar way. With this insurance, the insurance provider will charge you for what you use, rather than a monthly or annual flat rate.
This might seem like an interesting idea – you'll pay for each mile you drive, or for each hour on the road, and then you'll pay a regular fee each month for all the other aspects of coverage, like theft or damage coverage. If you're not using your car very often, you might want to consider this option - though you might also be charged additional interest fees on this type of payment.
A few final tips...
Understanding average monthly car insurance costs in the UK does provide a handy bit of insight, but there's also lots more to consider. Driver age, the category of the vehicle, and a bunch of other factors also affect car insurance prices.
- The average monthly premium cost was just under £44 in 2021, but lots people paying more and less than this.
- Paying your premiums monthly might end up costing you more than an annual lump sum.
- Though monthly payment plans can make money management easier.
Research
- https://www.gocompare.com/car-insurance/guide/how-much-does-car-insurance-cost/
- https://www.experian.com/blogs/ask-experian/should-you-pay-car-insurance-in-full-or-monthly/
- https://www.comparethemarket.com/car-insurance/content/cancellation-fees/
Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.
