For most of us, our cars, are a necessity. Sadly though – they’re an expensive necessity and the costs keep on rising – fuel, tax, MOTs, repairs, insurance…the list could go on and on. So, it’s no surprise that the Association of British Insurers (ABI) has announced that the average premium is now the highest it’s been since records began back in 2012.
The average cost of car insurance is now £462, an 8% rise since the first part of 2016. And if you think that’s bad, then spare a thought for young drivers – our data shows that they pay an average of £1,355^ to stay legal and insured on the roads.
The ABI have said that increases are inevitable – which comes as no consolation to the millions of motorists on Britain’s roads. To make matters worse, it’s unlikely that costs will decline any time soon as IPT (insurance premium tax) is set to increase to 12% this summer, adding yet more pounds to premiums.
There are several reasons why insurance costs are soaring and it’s not because we’re all worse drivers. Our cars are getting more techy, which means more expensive repairs, specialist labour and parts. Plus, let’s not forget the changes to what’s known as the ‘discount rate’ by the government which came into effect on 20 March 2017.
The discount rate is a formula that helps determine how much compensation is paid out. In the past, it was set at 2.5%, so anyone in line for a pay-out would receive their lump sum, minus that 2.5%. The changes now mean that the discount rate is set at -0.75% which means victims get more money but at the cost of insurance providers. Naturally though, the buck doesn’t stop there, as this cost is most likely to be passed on to consumers.
So, what’s a driver to do? Well, that’s the easy bit, you comparethemarket.com of course. Because the only way you can be confident about making sure you’re getting a good deal, is to see as much of what’s on offer as possible – and we can help you do that – just tell us what you need and we’ll do the rest. Half of customers that compared with us, could save £274** and more than a quarter saved £659***, so why not jump on and hitch a ride on the money saving band wagon and start comparing?
**Based on Online independent research by Consumer Intelligence during May 2018 50% of customers could save up to £274.51 on their car insurance premium.
***Based on Online independent research by Consumer Intelligence during May 2018 25% of customers could save up to £659.12 on their car insurance premium.