1 in 3 drivers say car insurance is unaffordable

Richard Aucock, Contributor
Fri, 28 Jun 2024

30% of motorists describe their car insurance premiums as either somewhat or very unaffordable, reveals latest analysis by the Financial Fairness Trust.

Its unique Financial Fairness Tracker shows that, unsurprisingly, the numbers are even higher for younger motorists and those on lower incomes, with around 40% describing car insurance as unaffordable.

However, even the richest are not immune, with 1 in 5 in the highest income group saying car insurance is too expensive.

The Financial Fairness Tracker is a robust and well-regarded survey, with around 5600 households questioned on their financial situation.

It revealed transport affordability is particularly worrying for jobseekers. 1 in 4 said the lack of a car was a major barrier to their job search, which rose to more than 4 in 10 of job-seeking households without a car.

Alarmingly, the tracker also revealed an ethnicity gap concerning car insurance affordability. 29% of white British groups said paying for car insurance was a struggle – which rose to 36% of those from minority ethnic groups.

As a result of the rising cost of transport, 18% of households have reduced their car use during 2024, with nearly 30% of those in the lowest income quartile using their car less due to costs.

"For many people, a car us not a cost they can cut back on. This is disproportionately impacting lower income households, who are twice as likely to find car insurance premiums unaffordable," says Financial Fairness Trust CEO Mubin Haq.

Professor Sharon Collard, chair in personal finance at the University of Bristol, added that many households have been shocked by the recent rises in their car insurance premiums.

"A car is essential for those who rely on their cars to get to work, and insurance is not a corner that can be cut. For those who are living on a tight budget, these increases will be hard to absorb."

Ask HJ

The excess wording on my insurance policy is not clear - can you help?

I am trying to fully understand the terms of the policy excess for my car. The document states under "Accidental Damage" the following: "£350 (this includes £250 voluntary excess). My understanding of this would be that the £350 includes the £250, so the total excess payable is £350. I have queried this with the Insurance Company and they say the total payable is £350 + £250 i.e.£600. Is this correct?

It seems that there is confusion around wording on your policy and this will need to be clarified with the insurer directly due to both of you having access to the documentation. If you have recently taken out the policy and you’re not happy with these charges, you usually have a cooling off period which could help you come out of your agreement early. But be mindful that there still may be some costs to pay by going down this route. If you’ve already passed this grace period and need to make a claim, you could raise a formal complaint if you feel that the charges weren’t clear when taking out the policy. Double check your policy documents carefully though before doing so, as there may be a more detailed breakdown elsewhere within your paperwork.

Answered by Louise Thomas

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