A charity has warned of an 'affordability crisis' as almost one in five drivers are only able to pay for car insurance by borrowing or cutting back on other essentials. 

Citizens Advice is urging the government to help tackle runaway costs, claiming 2.6 million people no longer drive because they are unable to afford the soaring cost of car insurance. 

This includes almost 900,000 people who have had to cancel their cover in the last 12 months, in addition to 1.7m people who have already been priced out of the market for longer than a year. 

Driving is essential for getting to work, buying groceries or travelling to healthcare appointments. But for those who had to cancel their cover in the last 12 months, 77 per cent told Citizen's Advice not driving had a negative impact on their day-to-day life.

Over seven million people, one in five, is having to borrow, cut back on essential items, or fall behind on other bills to pay their car insurance.

This is because the price of car insurance has soared by 40 per cent in the last two years; the average cost of car insurance for the last 12 months was £812 according to Citizen's Advice.

Citizens Advice also found young people (18-34) pay twice as much for their car insurance as middle aged adults age 35 to 54 and 56 per cent of young people pay monthly for their car insurance which tends to be more expensive than paying annually due to added interest.

One in four people on benefits fell behind on their car insurance payments in the last 12 months, compared to just over one in 10 drivers overall. 

The average cost of car insurance is £546 higher for ethnic minorities- compared to white drivers, too. Separate to the charity’s previous work on the ‘ethnicity penalty’, which found that people of colour are facing disproportionately high car insurance premiums, this latest research found this group is almost twice as likely to borrow  to pay for their insurance compared to white drivers in the last year. 

The charity is also concerned that soaring premiums could lead some people to break the law by cancelling their insurance but continuing to drive uninsured. This has wider financial impacts for those with insurance should they be involved in an accident with an uninsured driver. 

Citizens Advice is warning that insurers need to be made to be more transparent on how they price car insurance cover and the government needs to consider targeted support to help those most at risk.

Dame Clare Moriarty, chief executive of Citizens Advice, said a "shocking" number of people were being excluded from driving and was concerned a hidden affordability crisis is affecting millions of people. 

She added: “We welcome commitment by the government to tackle this issue but it’s crucial that nothing is left off the table. Bold action must be taken to tackle skyrocketing costs, including targeted support for those struggling most. We need a market that works for everyone, leaving unaffordable insurance premiums behind once and for all.”

Amy, 21, has been driving for almost a year. She works part-time as an office administrator and car insurance is her biggest bill. For third party, fire and theft cover it costs Amy £100 a month; which is more than a quarter of her income. With no train station in her town, she relies on her car to get to work, do her shopping and see her family but she must budget carefully to keep it on the road.

“£100 a month might not sound like a lot to a lot of people but I have to budget quite a lot in order to afford my car. It’s probably the most expensive thing I have to pay for.

“When you’ve got rent and bills to pay as well, it adds up. I pay my insurance monthly which is a bit more expensive but I could never afford to do it annually.

“I can’t really afford to buy luxuries like going for days out, because it takes such a big part of my pay. I want to go out with my car, but my car costs are stopping me from going out.”