Car insurance £115 more expensive than a year ago

Car insurance £115 more expensive
11 July 2016

Driving is expensive, and getting more pricey by the year. While drivers have seen some costs fall, it looks like tax rises are kicking in.

A car insurance index reports that premiums have shot up by 19% in the last 12 months, which on average, adds £115 to the annual cost.

This is the biggest increase seen since mid-2011, which means on average, motorists are now paying £715 for comprehensive premiums, when the price last year was £600.

Why the hike? Well, this is thanks in part to the Insurance Premium Tax rise which was put in motion by chancellor George Osborne in 2015, which went from 6% to 9.5%, and will increase to 10% in October.

Insurers will be passing these costs on to drivers.

One group who have seen the steepest increase (at 24%) are drivers aged 61. However, their premiums are still £297 less than the national average, at £418.

All age groups have seen hikes in price, according to the index from comparison website, written in tandem with Willis Towers Watson.

Amanda Stretton, motoring editor at Confused, says: "We've not seen price rises of this magnitude for five years – a 19 per cent annual increase is substantial to say the least. And these price rises are being felt across the board, for drivers of all ages and genders, in all UK regions."

"If prices continue to rise at the rate we've been seeing, we could be facing the possibility of average comprehensive premiums breaching the all-time high seen in 2011, when they peaked at £858."

"This, combined with rising fuel prices and increased motoring costs across the board, could result in a sizeable dent in drivers' pockets."

Furthermore, the Brexit decision could see drivers paying even more in the coming months, as the sterling falls against the dollar, however, trying to predict what the markets will do, is like trying to plait marmalade.

TOPICS:   Motoring


  • Paul W.

    The tax increases by 4% but premiums increase by 19%. What the betting their profits increase by 15%!

  • Anita C.

    try Ireland where it went up by approx 150%

  • Christine G.

    Honestly. If my car insurance went up by whatever percentage the doom mongerers say it's gone up by every year, I would be paying about £3000 a year by now!!!

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