The typical annual cost of driving a car has risen by £267 year-on-year, according to new research from Compare the Market. The research looks at the average annual cost of car insurance, taxes, and petrol. It now typically costs £1,997 to drive a car for 12 months compared to £1,730 last year, it said.

The research found that car insurance has had a substantial impact on the increased cost of driving. A typical motor premium has risen by £295 year-on-year, to reach £884. This significant rise may in part be due to an increase in the cost of claims for insurers, the comparison company said. Higher inflation will have likely impacted many areas of the motor repair industry including the cost of spare parts, energy, and hiring specialist mechanics, it added.

There are concerns that driving is becoming increasingly unaffordable for many motorists. More than three in ten drivers (31%) found it difficult to cover the cost of driving in the past month, as almost all drivers (94%) have seen the cost of driving their cars increase. This includes more than half of drivers (56%) who have paid more for car insurance in the past six months. As a result, nearly eight in ten drivers (78%) are worried about how they afford their car insurance policy.

The rising cost of driving is harming motorists’ finances and their social lives, Compare the Market said. More than four in ten drivers (43%) expect they will need to take on additional debt, such as loans or credit card borrowing, to keep driving. To reduce rising costs, 44% of motorists are making fewer journeys and 27% are buying less fuel. More than one in five drivers (22%) said higher car running costs have meant their social life has deteriorated, and nearly a quarter (24%) have visited their family less often.

Drivers could reduce the cost of their car insurance by shopping around for a cheaper deal, the company said. Nearly three in ten drivers (29%) have shopped around recently, while 20% are now paying for their car insurance monthly rather than annually to spread the cost. Compare the Market customers could save up to £516 on their car insurance. More than one in five drivers (22%) also helped older relatives to switch insurers and 11% helped older friends.

Julie Daniels, motor insurance expert at Compare the Market, said: "The surging cost of car insurance means some drivers are finding it difficult to stay on the road. As a result, many motorists have been forced to make fewer journeys or are cutting back on seeing friends and family. Worryingly, some expect to take on further debt to keep driving.

"With car insurance pushing up the cost of driving significantly, it’s important for motorists to compare prices online ahead of renewal as there could be hundreds of pounds to be saved. It’s also worthwhile for people to consider if they’re able to encourage or support friends and family members to look for savings online.”

Average Annual Cost of Driving
Cost name		October 2022		October 2023
Insurance		£589		£884
Fuel (petrol)		£921		£878
Est. VED (Road Tax)		£165		£180
MOT		£55		£55
Total cost per year		£1,730		£1,997