How does Insurance Premium Tax (IPT) affect car insurance?

How has IPT increased over the years?

In 1994, the introductory standard rate of IPT was just 2.5%. But over the years IPT has increased, to 6% in 2015, then to 9.5% in November 2015, and in October 2016 it rose by 0.5% to 10%.  Today’s rate of 12% means that IPT has doubled in only a few years.

There are also concerns that rising car insurance costs could lead to more uninsured drivers on the road. (The Motor Insurers’ Bureau (MIB) reports an estimated one million uninsured cars already on UK roads).

**Based on our Premium Drivers Report, April 2019.

***Based on our Young Drivers Report, February 2019.

How can I cut the cost of car insurance?

With the rising cost of repairs, IPT and the VED tax bands introduced on 1 April 2018, it may seem like finding cheap car insurance is an impossible challenge. 

While there’s nothing you can do about the rises, there are steps you can take to help cut the cost of car insurance. Take a look at our top tips for cheap car insurance for more information.

And by simply comparing car insurance with us, you could save up to £219**** on your next car insurance premium.  
****50% of people could achieve a quote of £219 per year for their fully comprehensive car insurance based on Compare the Market data in February 2019