Car insurance costs spike in the fourth quarter of 2018
The comparethemarket.com Premium Drivers report showed the average car insurance premium the final quarter of 2018 jumped from £727 in September to £744 in October, before reaching £761 in November (averaging £744 over the quarter).
Over the past five years the cheapest premiums available have also become significantly more expensive. As it stands, the average cheapest premium available to drivers is £628, up £181 since the start of 2014. Motorists are paying an average of £217 more for their car insurance today than they were five years ago.
However, premiums remain below their absolute peak. They hit a quarterly average of £757 in the fourth quarter of 2017.
The difference between the cheapest and average premiums stood at £116 in Q4 2018. This price gap was greatest for higher risk drivers aged 17-24. The average young driver now pays an average of £1,520 but could save up to £324 by shopping around.
The rising cost of insurance is partly due to hikes to Insurance Premium Tax which has doubled from 6% to 12% since 2015.
Dan Hutson, head of motor insurance at comparethemarket.com, said: “Prices have fallen slightly over the past 12 months but drivers are still paying hundreds of pounds more to insure their vehicle than they were three, or even five years ago. However, the potential saving of £116 gives motorists some hope. As premiums have risen, so too have the potential savings to be made. The only way to mitigate these rises and encourage competition among providers is for consumers to shop around every year.”