Car insurance premiums increase for first time in three years

10th October 2014

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The cost of insuring a car has risen for the first time in more than three years and more increases are expected.

The average cost of annual comprehensive car insurance is now £582, up from £579 in the second quarter of the year, according to comparison site Confused.com, and while the increase is just £3, it represents the first rise since June 2011.

Confused said the cost of insuring a vehicle is still down year-on-year and the cost of comprehensive cover last year stood at £652 but consistent falls that have benefitted motorists may now be unsustainable.

Both men and women have seen quarterly price rises of £1 and £4 respectively although when broken down by age and location, some motorists have been harder hit than others.

Motorists aged 19 have seen quarterly price rise of £56, or 3.7%, and 20-year-olds have seen the cost of insuring their vehicle rise £41, or 3%. However, motorists aged 66 have experienced the largest price increase as premiums rose 6.1%, or £19.

Those living in the South have drawn the shortest straw, with premiums rising 2.6%, or £12, over the last quarter – the highest increase of any region. Drivers in Southampton have been most affected, with insurance costing £18 more this quarter.

Steve Sanders, finance director at Confused.com, said the incremental increases in average insurance could signal the end to falling car insurance premiums.

‘The decreases in car insurance premiums that we’ve been experiencing for the last three years have been welcome news for motorists, however over recent months the heat has certainly come out of these price reductions,’ he said.

‘Our latest figures suggest that these price drops are now levelling out…It’s been a mixed bag over the last quarter, with price movements affecting consumers in different ways. These latest quarterly price movements are likely to fuel further speculation that the insurance pricing cycle may turn in the near future.

 

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