Average car insurance premiums rise by 31%

Car insurance premiums have increased by a staggering 31% on average from £489.80 to £639.23 in the last year, according to research by insuresupermarket.com.

Richard Mason, director of insuresupermarket.com says: "Despite new entrants like Budget and Barclays promoting their low cost offerings, it seems that the average cost of premiums is still on the rise, the biggest increase occurring in the last six months of 2004 when premiums soared by 25%. This is likely due to a number of factors including the increasing cost to the industry of uninsured drivers and further consolidation in the market meaning only a few big players dominate, and from January onwards the impact on insurers having to absorb the cost of regulation.

"Another factor in the increasing average cost could be the greater number of younger drivers who are now able to find better deals thanks to both new players like Quinn Direct and existing players like Norwich Union, who has recently extended their pilot ‘pay as you drive’ scheme. Although premiums are still relatively expensive for this group, younger drivers now have far more choice and are now able to buy polices that once would have been out of their reach.

"Equally, the increase in popularity of expensive statement cars and the continuing appeal of 4x4 vehicles may also have contributed to this significant rise in premiums. Whatever car you own, the key to getting a good deal is to make sure you shop around each and every time your insurance is up for renewal, not just for the first year. Insurers are notorious for luring people in with low first year premiums only to hike them in the second year and rely on inertia to keep the custom."

Being scrupulous about shopping around and asking for the right cover is all important so insuresupermarket.com looks at different ways to cut your motor insurance premiums:-Adding an older driver can cut premiums by 12-15%
Reducing mileage (by car sharing or telling your insurer if you only use the car at weekends) - can save 15%
Think before making a claim – it could add 23% to your premiums
Offer to pay a higher excess.
Protecting your no claims bonus adds between 6%-17% to your premium
Some insurers give lower premiums to married rather than co-habiting couples - as much as 30%
Average premiums for ‘cooler’ brands of car are between 20-25% more expensive than other brands of similar performance
Premiums can cost over TWICE as much with a women only insurer