14th April 2015
Car insurance premiums rose in March for the first time in four years to an average of £423 per year, compared to £399 a year ago.
The data, from MoneySuperMarket, the comparison website, shows that car insurance premiums have been dropping year-on-year since 2011, falling by almost a quarter (24 per cent) between March 2011 and March 2014. However, 2015’s figures show a six per cent rise since March 2014 – adding £24 to a typical policy.
Premiums increased by £7 between February and March 2015. This follows three months of falls since November 2014, when premiums reached an annual high of £456.
March typically sees a rise in car insurance premiums thanks to the introduction of new registration plates at the beginning of the month. The sale of new cars and the resulting increased activity in the second hand market stimulates demand for insurance, which allows insurers to increase their prices.
A similar phenomenon following the other new registration plate date on 1 September helps push up premiums in the autumn, hence the annual highpoint reached last November.
Kevin Pratt, insurance expert at MoneySuperMarket, says: “British motorists have benefitted from a very competitive insurance market recently, with prices dropping by almost a quarter (24 per cent) since March 2011. However, prices can only go so low before insurers have to bring them up again.
“This is no consolation for motorists, though. Driving is expensive enough, without the rising cost of insurance. As prices rise, it’s more important than ever that motorists shop around for cover, to ensure they’re getting the most for their money.
“It’s always worth remembering that many drivers lose out when their policy is automatically renewed by their insurer. Existing insurers often charge more than the driver would pay elsewhere, so it always pays to shop around for cover. ” Pratt says that customers can save up to £224 by doing so.