A 25 per cent jump in car crashes caused by uninsured drivers is racking up millions of dollars in debt nationwide, but a Northland road safety advocate says making third-party insurance compulsory is not the answer.

In the year to May, AA Insurance handled more than $7.7 million in claims involving 3000 uninsured drivers, or $2 million more than the same period last year.

The number of uninsured drivers involved also rose by 700.

AA Insurance Head of Customer Relations Suzanne Wolton said the increase was disturbing.

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"Uninsured drivers can amass big debts if involved in a crash, and this can have life-changing consequences."

But Roadsafe Northland Whangarei co-ordinator Gillian Archer said car insurance was a discretionary cost for people on low incomes.

"People who don't insure, it's usually for the reason that it's just one more bill they can't afford. Just keeping the car going and safe and legal is probably a higher priority," Ms Archer said.

Consultation under the Government's road safety strategy revealed making third-party insurance compulsory had no affect, she said.

"They looked at jurisdictions where it was [compulsory] and the compliance rate was the same as ours. That's why the Government said there's no point in making it compulsory when the actual compliance level in New Zealand is the same as other places internationally."

An AA driver survey done this year revealed the main reasons drivers go uninsured were the cost, a belief the car wasn't worth insuring, or the driver wasn't eligible for cover. One uninsured driver was facing a $41,000 repair bill after rear-ending an insured person's car.

"The simple fact is that if you don't have insurance, but damage someone else's property and it's your fault, then you're liable to pay for it out of your own pocket, cent by cent," Ms Wolton said.

"We still have drivers on our books who been paying off their debt since the 1990s. "

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It's estimated that at least a quarter of a million, or 8.5 per cent, of New Zealand's cars are uninsured.

Calls to follow the lead of places such as the UK and New South Wales and make insurance compulsory have failed to gain traction here.

The Insurance Council has argued that the problem lies with uninsurable people like recidivist drink drivers, and compulsory third-party insurance would bump up insurance costs for everyone.