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Why is car insurance so expensive in the UK?

Getting an expensive car insurance quote is no one’s idea of fun. But why is UK car insurance so expensive? And why do prices seem to be going up?

In this blog, we’ll explain how insurers set their prices, why insurance is getting more expensive, how experience-based discounts work, and what you can do to save money. 

The cost of your car insurance is based on risk

The more likely an insurer thinks you are to make a claim, the higher your price will be. They use a lot of data points to assess your risk, looking at things like how often you drive, what type of car you have and where you live.

Past driving experience is an important pricing factor

Your driving experience is a big pricing factor when it comes to car insurance. So the more experience you have, the better.

If you’re new to the UK, most insurers won’t count the driving experience you have in another country, which is why you might find yourself priced like a brand-new driver. At Marshmallow, we look at all your past driving experience - from any country - to give you a fairer deal. 

Claim-free driving experience makes your insurance cheaper 

In the UK, people who’ve been driving for a number of years without making a claim earn a No Claims Discount score. The better the No Claims Discount score, the cheaper the car insurance price. 

If you’re new to the UK, most insurers won’t recognise your claims-free history from another country. As a result, your cover is often more expensive than drivers with driving experience in the UK. 

Enter Marshmallow! We accept your claim-free driving history from all countries, as long as it can be proven by your previous insurer. That means you can save up to 45% on your car insurance when you sign up with us.  

Car insurance is more expensive than it used to be

Even with experience-based discounts, car insurance is still a costly must-have. And one that’s getting more expensive. There are a few reasons why car insurance is more expensive than it was a few years ago. 

Like everyone, insurance companies are facing higher costs. To keep providing quality customer service, great products and a thorough claims process, insurance companies are having to change the way they price policies. 


During the lockdowns of 2020 and 2021, the number of people driving on UK roads dropped dramatically. Car insurance prices naturally went down as the risk of accidents was much lower. But, road traffic is now back to pre-pandemic levels. That means more cars on the road, and more accidents.  

Claims delays

There is currently a shortage of cars and car parts in the UK which is having an impact on garages. That means fixing cars and providing replacement cars is taking more time and costing money more, too. Insurance companies deal directly with garages and the cost of these issues has a knock-on effect on policy prices. 

There are things you can do to make your cover cheaper

Agree to track your driving 

Lots of insurance companies will offer you a black box to lower your policy price. A black box tracks your driving, making you less of a risk to insure. We offer a similar app-based option for some of our customers called Marshmallow Miles, which is aimed at rewarding safe drivers.

Stop paying for extras you don’t need 

When you sign up for a policy, make sure you know what you’re paying for. You might find there are lots of features, like breakdown cover, that you don’t need. At Marshmallow, we have multiple plans with varying amounts of features and varying degrees of flexibility. 

Pay more if you make a claim (excess)

The amount you agree to pay if you make a claim is called an excess. Your total excess is made up of the amount set by the insurer (Compulsory Excess), and an amount that you can choose to add on top (Voluntary Excess). You will normally agree to add your Voluntary Excess when you sign up. And as a rule, your total premium will come down - though there are exceptions. 

Remember, if you have an accident you will need to pay your total excess - that’s your Compulsory and Voluntary excess combined. When you sign up, think carefully about how much Voluntary Excess you can afford. 

To find out more about your car insurance excess, read our blog here. 

Choose practicality over power

Instead of a big, speedy car, why not opt for something smaller and more practical? Cars like the Volkswagen Polo or Ford Fiesta are often cheaper to insure as they’re safer to drive and don’t get stolen as often. 

So now you know how UK car insurance is priced, and what you can do to save money.

Remember, getting a quote with us is a great place to start - we save people who’ve moved here an average of £230 a year on car insurance by looking at all their past driving experience from anywhere in the world. 

Get a quote now