Cost of cover creeping up for motorists

Car insurance premiums rose by 4.5 per cent in the second half of last year, according to research from price comparison site moneysupermarket.com.

The average lowest premium stayed constant at £290 from 2006 through to the first half of 2007, but then the rise started to kick in, taking the average premium for the second half of the year to £303.

Research conducted during the most popular months for buying car insurance1 showed 64 different providers all coming in with the most competitive quote at some stage, with Swiftcover and the Post Office taking top spot most often.

Richard Mason, director of insurance at moneysupermarket.com, said: "As an internet-only provider, Swiftcover has a price advantage over many of its rivals because its overheads are so low. But it is great to see the Post Office and the RAC also being very competitive.

"The key thing for drivers is that 64 different providers are successfully competing to produce the cheapest premiums for them. The market is not monopolised by a handful of providers any more and this can only be good news for motorists."

The average lowest premium for a male driver climbed by 4.9 per cent to £320 in the second half of 2007, while female premiums climbed by 4.1 per cent to £279.

Richard Mason continued: "Men are continuing to pay about £40 more for their insurance than women, but this has as much to do with the type of cars they drive. Men are more prone to buy cars with bigger engines, which then attract higher insurance premiums."

The research also shows that drivers in their sixties continued to enjoy the cheapest quotes of all.

Richard Mason added: "Generally motor insurance becomes cheaper as you age. Yet a fascinating thing about the research was that females in their thirties have consistently been paying less for their insurance than those in their forties over the past two years."