Motorists hit by a 13% car insurance price increase
Car insurance prices have risen significantly over the past year, with average costs rising by as much as 13%.
The increase takes the average premium to approximately £685, part of this increase comes from the Insurance Premium Tax (IPT). The increase in IPT is to fund investment in flood defences and resilience measures and last rose in November 2015 when it increased from 6%.
IPT is a tax on insurers and is typically passed on to consumers, it is a tax collected and remitted by insurers and is a tax on premiums paid by policyholders.
The tax rose from 6% to 9.5% in November and is set to rise by a further 0.5% from October.
In terms of driver insurance premiums older drivers pay considerably less than younger drivers, with the average premium for over-50s at £300 compared to £1,600 for under-25s.
Research highlights a shift in technology with 'black box' telematics policies, which price young drivers depending on how well they're monitored to drive, offering approximately 48% of the best deals for under-25s.
One of the best ways to cut insurance prices is to never auto-renew, always compare prices first - it could result in you saving hundreds.