After nearly three years of falling premiums, average prices to insure a car are now back on the way up, with those in the 23 to 29-year-old band seeing the biggest increases.
Figures from the AA show that the average cheapest cost for comprehensive cover has jumped by 5.2 per cent in the three months to the end of June. Drivers in their 20s were hit hardest, with 23 to 29-year-olds’ premiums rising by 6.2 per cent on average – more than any other age group.
This means that those in their 20s can typically expect to pay £683 to get fully comprehensive insurance on their car. The average insurance quote across all ages, on the other hand, has risen to £549.
The days of cheap car insurance premiums are over – price rises are inevitable.
Explaining the increase in the cost of arranging car cover, Janet Connor, managing director of AA Insurance told the BBC: “Insurers have been releasing their reserves to maintain their competitive edge to the point where this is no longer sustainable – and we are seeing premiums beginning to rise once more."
She added: "The days of cheap car insurance premiums are over – price rises are inevitable."
Contributing to the rising price of insurance is the hike in insurance premium tax – announced by George Osbourne in the spring Budget – which is set to add £18 to the typical cost of arranging comprehensive car insurance.
Other forms of insurance have also seen a jump in prices, with AA reporting a 1.3 per cent rise in the cost of home and contents insurance.