Car insurance costs rise for everyone – except under-25s
The Consumer Intelligence Motor Insurance Index, used by the Office of National Statistics to calculate official inflation statistics, shows while average premiums rose by 13 per cent for over 50 drivers and by seven per cent for people aged 25-49 between October 2013 and August 2015, they fell by 20 per cent for motorists aged under-25.
In the 12 months from August 2014, average car insurance ‘best buy’ prices rose by 4.6 per cent, and average costs for drivers aged 50+ increased by 8.6 per cent. However, costs for motorists under-25 have gone into reverse, dropping 5.5 per cent in the same period.
Consumer Intelligence attributes this widening disparity to the growth in black box technology such as telematics insurance. Its data suggests 46 per cent of the most competitive quotes for under-25s are offered by telematics providers, compared with 32.5 per cent in October 2013.
Despite significant reductions in cost, younger drivers still pay higher average premiums – the average cheapest premium for all motorists in August 2015 was £696, but for motorists aged under 25 it was £1,680. Average premiums for drivers aged 25-49 were £481, over-50s £258.
Ian Hughes, chief executive of Consumer Intelligence, said: “Younger drivers are seeing the benefits of the innovation in the market, such as Black Box policies, and that is reversing the massive increases seen at the turn of the decade.
“Older drivers are to an extent helping to fund the premium reductions for younger motorists and need to ensure they are receiving the best value for money from their insurer.”