Motorists see car insurance costs driven through the roof

Car insurance premiums rose by an average of 14 per cent during the second quarter of 2016, compared to the same period a year ago, according to new analysis from MoneySuperMarket.

MoneySuperMarket analysed over three million customer quotes between April and June 2016 to identify overall and regional price fluctuations. The average premium paid in Q2 2016 was £512, up 14 per cent from £448 in Q2 2015 - a £64 hike. The analysis painted an even worse picture for drivers in their thirties, with the average policy rising by 22 per cent year-on-year, from £436 to £530.

It was a particularly tough quarter for drivers in Harrow who saw premiums rise by almost a quarter (22 per cent, to £774). Drivers in Ilford (£876), St Albans (£504), Wolverhampton (£644) and Kingston upon Thames (£476) also experienced hefty year-on-year hikes, with prices in each of these areas jumping by over a fifth (21 per cent).

Drivers in the city of Perth saw the smallest average rises3, with policies increasing by just seven per cent to £302. Other minimal price rises were seen in the Scottish town of Dumfries (up eight per cent to £291), Aberdeen (up nine per cent to £348) and Paisley (up 11 per cent to £381). The cheapest place in the UK to insure your car during spring 2016 was the Scottish border town of Dumfries (£291), while drivers in East London paid the most at £999.

Dan Plant, consumer affairs expert at MoneySuperMarket, said:“Since the increase in insurance premium tax (IPT), premiums have risen sharply and this has been especially evident since the beginning of 2016. Unfortunately for motorists, IPT will rise again to 10 per cent in October 2016, meaning we can expect to see further increases in premiums as we head towards the end of the year. Insurers are also charging more because of high levels of pay-outs for whiplash claims, many of which are thought to be fraudulent.

“Regional price increases could be the result of a surge in accidents or car crime, and each area will have its own story. To combat higher quotes for renewal premiums, drivers should start hunting for cheaper prices, rather than simply paying what their existing insurer is asking for without checking if there’s a cheaper alternative.”