Saga Car Insurance recently undertook a survey which revealed that older drivers pay more for each and every car journey they make. According to the results people over 50 contribute towards 47% of the UK’s motoring spend and their mileage costs them roughly about 63% more than younger drivers. This is attributed in part to people aged 50 plus choosing new and premium cars much more often than those under 50. More than 60% of new car spend is made by older drivers. In 2015 (up to September) older drivers were two times more likely to buy a Jaguar, Porsche or Mini than other motorists. A preference for premium cars may also be the reason for higher maintenance and spare part bills in the older age group. Saga state that in over 50 households the typical motoring spend is £311 per month.
Saga say that cars are more critical to older drivers as vehicles enable them to be more independent and mobile. Chief Executive of Saga Roger Ramsden says “Saga is fighting for fair motoring charges including cuts to the cost of car parking at hospitals and abolition of Vehicle Excise Duty, [which we believe] imposes an unfair burden on older drivers who driver fewer miles, but for whom a car is essential.” He adds: “It is essential the Government keeps motoring costs under control for older age groups. Pensioners on fixed incomes via their pensions feel the burn the most. Their choice of shopping and visiting can largely depend on the availability of plentiful and cheap or free parking.
Older drivers are also hit hard by insurers, even Saga! Part of the issue is that older drivers are less internet and shopping savvy and tend to be more brand loyal rather than shop around for a better deal. A fifth of 29.6 m drivers in the UK allow their car insurance cover to just roll over. Leading comparison site Moneysupermarket.com undertook research which confirmed that people over 55 were more likely to just automatically renew insurance policies without searching for a better quote. Managing Director of Moneysupermarket.com, David Jones said: “This is because they tend to be more trusting of their insurer and don’t believe they’ll be treated badly. ‘But this is often a long way from the truth. Many insurers take advantage of customers’ trust and just increase their premium year after year”. The research revealed that a 33% of the over 55s polled failed to check their renewal quotes and continued with their existing provider. The generation gap is even more vividly demonstrated by comparing these statistics: four in ten people over 55 had not changed their car insurer for five or more years. However, nine out of ten 17 to 34 year olds shop around every year. The Office for National Statistics has reported that 28% of people aged over 65 have never used the internet.
Saga and Rias, two firms which claim to represent the needs of older people have been directly criticised by customers who say that their premiums are automatically increased when the annual insurance contract ends. One Rias customer stated that their annual car cover premium went up by 70% even though this drivers hasn’t made a claim for 26 years and has had a clean driving licence for 47 years. Many people just accept the new contract and believe they just have to suffer the increases or they think they get a good deal through being loyal. Founder of consumer group Fairer Finance James Daley sums it up well: ‘An awful lot of people — particularly those older customers who are not online — assume you’ll get a benefit by sticking with the same company in the shape of lower prices. But this is certainly not the case”.
Saga and Rias are quite clever; they offer discounts to new customers but hit existing customers with higher premiums. Smart existing customers who get offered these mad increases are now starting to hit back, some are incensed when they see the same insurer offering cheap premiums to new customers. Many of these people are now ringing round companies or checking online to get better deals. One Rias customer was quote £366.41 for his Honda Jazz and he found a better deal at £165, saving himself £171.41. Some Rias and Saga customers have discovered better deals and then gone back to Rias and Saga to see if they would match the cheaper deal. Both Saga and Rias have agreed to match the cheaper deals but customers are furious that they have to barter this way. One Saga customer received a £1,377 renewal quote from Saga and found a deal for £495 on Comparethemarket.com from… Saga! He’s now cancelled his cover with Saga unsurprisingly. No wonder that Saga’s survey found that older drivers pay more!! Talk about ironic!