Motor premiums historically reach their annual peak in winter and comparethemarket.com’s latest Premium Drivers Index, which analyses the difference between the ‘average’ and the ‘cheapest’ premiums – known as the savings variable – found the quarterly difference between the two grew to £118 between June and August this year.  This is the biggest gap since records began in 2012.

The average premium during the same period cost £697, up from £679 in the previous quarter and from £605 year-on-year – an annual rise of £92. The cheapest policies averaged over the quarter and across age groups have also seen an increase, rising from £510 to £579 in the last 12 months.

According to the comparison site, a rise in incidents such as staged car crashes, repair bills and insurance scams are just some of the reasons why premiums have risen as insurers look for ways to absorb increased costs. The significant increase in Insurance Premium Tax introduced over the past year has also contributed to pushing up the price.

Historically average premiums have risen by nearly 6%. Assuming the same trend occurs this year, drivers who automatically renew their policies with the same provider could see their annual motor insurance costs rise by £41 to £739.

Dan Bass, head of motor insurance at comparethemarket.com, said: “2016 has been tough for British drivers, with premiums rising consistently throughout the year. When you consider that the quarterly “switching saving” for the same period in 2013 was only £78 – rather than £118 today – it becomes easier to see how the cost of insurance has been driven up over the years and motorists’ pockets have taken a serious hit.

“Previous data suggests that we can expect to see a rise in motor insurance throughout the rest of the year. There are a number of factors contributing to this rise, but clearly insurers are not feeling any competitive pressure to reduce their prices.”

However Bass added that it is not all doom and gloom for drivers, noting the bigger the difference between cheapest and average premiums, the greater the saving that can be made by shopping around.

Analysis suggests if premiums increase as expected, drivers could stand to save an average of £130 by shopping around by the end of the year, nearly £12 more than the available savings in this last quarter.

“The fact remains that shopping around for insurance is the most effective way to reduce your annual motoring costs,” said Bass. “It keeps competition levels high and premiums as low as possible for all age groups.”