The average car insurance premium (for a fully comprehensive policy) in the UK now costs £629, a 4.8% jump from last quarter and an 8% jump on last year.
The worst affected groups, according to the recent report from Confused.com, are the elderly, who now pay 15% more than they did last year, and those living in the West of England, whose premiums rose by 12% to £493.
Younger drivers saw the lowest increase, but still sit at the top of the table in terms of how much they actually pay in real terms. In London, drivers aged from 17-20 currently pay an average of £2,799 for the premiums on a fully comprehensive policy.
“It would seem that the days of cheap car insurance really are over” said Steve Sanders, the director of finance for Confused.com, “just like 6 years ago we ‘re seeing substantial increases in prices for most UK motorists, with only the very youngest of our driver profiles being relatively unaffected.”
All of this comes after three consecutive years of declining costs of premiums across the country. Part of the blame is being placed on the shoulders of George Osborne who, in his Summer budget, announced an increase in premiums tax from 6% to 9.5%, boosting the costs of policies across the board.
Sanders commented on this increase saying that “with the Government ‘s increase in insurance premium tax, rising from 6 to 9.5% this November, we ‘re likely to see continued inflation in car insurance prices across the rest of 2015, and into 2016.” The increasing premiums has, naturally, been regarded as something positive for investors and brokers like Andreas van Embden from Peel Hunt who emphasised the effect on share prices and profits for the insurance industry that follow on from an increased income from premiums.