Motorists hit by 13% car insurance price hike


Car insurance prices have rocketed over the last year, with average costs rising by 13%, according to new analysis.

The hike takes the average premium to about £683, says market research firm Consumer Intelligence.

It blames Insurance Premium Tax as part of the reason for the increase.

The tax, which is directed at insurers but largely passed on to consumers, rose from 6% to 9.5% in November last year and is set to rise by a further 0.5% from 1 October, as announced in this week’s Budget.

See the Insurance tax rise to fund flood defences news story. 

For the over-50s, average premiums are up by 15.3% in the year to February, compared to 9.3% for the under-25s.

However, older drivers still pay considerably less than younger drivers, according to the research, with the average premium for over-50s at £298 compared to £1,600 for under-25s.

The research also highlights a shift in technology with ‘black box’ telematics policies, which price young drivers depending on how well they’re monitored to drive, offering 48% of the best deals for under-25s.

One of the best ways to cut insurance prices is to never auto-renew, always compare prices first – it could result in you saving hundreds.

You can compare car insurance prices via Moneywise.

Also read our cost cutting tips in Are you stuck in a car insurance loophole? 

Your Comments

Article accounts for 4%  rise, one third that proposed by the car insurance companies!  We were told by the insurance companies that a substantial amount of a premium is due to claims from contrived accidents, including one memorable case of a bus load of passengers all claiming whiplash when the driver deliberately crashed into another vehicle at low speed! The insurance companies alleged that such practices would be stamped out.  So why haven't premiums gone down?  Answer: profiteering and there's sweet all being done by the appropriate agencies to keep the insurance companies under control.