In March the European Court of Justice may decide that it is no longer legal for insurance companies to charge different premiums based on gender. The effect of this is likely to be a significant increase in car insurance costs for women whilst costs for men may well decrease. This is likely to be more noticeable for younger drivers.

The relative costs of car insurance for younger men and women are fairly well documented. But what about the longer-term view? Research from car insurance comparison site Tiger.co.uk provides further insight by looking at the price differential driven by gender over the lifetime of a male and female driver, based on identical cars, addresses and driving histories.

At 19 years old a man could currently expect to pay over 70% more than a woman. By the age of 24 this differential drops to about 20%. But the gender premium is maintained through their 20’s so that by the age of 29, the cost of insurance over a 10 year period has averaged 43% more for the male driver.

Through their 30’s it’s likely that the cost of car insurance will actually be around 4% cheaper for males. For women, the decade from their mid-50’s sees car insurance for women becoming about 3% cheaper than for men. But after retirement the pendulum swings back the other way and assuming that both continue to drive for another 20 years, men will pay about 13% less than women across this period.

So how does all this add up? Tiger.co.uk gender analysis* estimates that over comparable 65 year driving histories, women will pay about 4% less for their car insurancethan their male counterparts. But because this differential is weighted towards younger drivers, if a 3% annual inflationary adjustment is applied then lifetime insurance costs for men are actually 3% cheaper.

A spokesperson for Tiger.co.uk commented: In gender terms, car insurance is actually a game of two halves, with younger males paying substantially more than their female counterparts and then this situation being reversed albeit with less dramatic differences for older drivers.

So we would expect changes in European legislation will have far greater impact on the relative pricing of policies for younger drivers than they will over the average lifetime of a driver. We would encourage all drivers, regardless of their gender, to shop around for the very best car insurance quotes .Given the possibility of changes in European legislation it is probably wise for any woman looking to renew their policy in the next few weeks to do so at the earliest opportunity.

*Based on prices taken from Tiger.co.ukfor a VW Polo 1.2, Renault Scenic 1.6, and a Ford Focus Studio, £250 voluntary excess, no claims/convictions, IP1 postcode.

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Name: Jo Buck
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