Research from Consumer Intelligence – whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics – has found just how fast car insurance bills are rising compared to inflation.
Five times faster is the result, with average annual bills at £755. According to Consumer Intelligence, average premiums went up by 14.6% in the past year; inflation, by 2.9%.
For over-50s drivers, average premiums rose 16.5% in the year to September. However, the bills for this age group were the lowest at £434.
The under-25s – who pay an average of £1,719 – saw a smaller increase of 11%, with the use of telematics keeping prices in check. According to Consumer Intelligence, 65% of the most competitive prices for under-25s come from telematics policies.
In terms of where you are in the UK, the highest annual bills were found in London and the North West of England. Motorists in these places pay over £1,000 a year, compared to Scotland’s average of £518.
“Prices are stabilising but the future is unclear with the new Ogden rate, whiplash reforms, and the possibility of another Insurance Premium Tax rise in the Budget,” said Consumer Intelligence pricing expert John Blevins.
He noted that car insurance claim costs have increased in the past three months partly because of higher repair costs for today’s more technologically advanced cars. Blevins also cited the weakness of the pound, which translates to the rising cost of parts.
“Older drivers are being hit with higher premiums because they are driving for longer and consequently becoming involved in more accidents,” he added.
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