The cost of car insurance has risen by almost 6% in the last year alone, new research has found.
According to the Sainsbury’s Car Insurance Index, the average in June this year was £514.36, compared with £486.13 in July 2007. This is the first time since the Index was launched in June 2005 that the average premium has exceeded £500.
Older motorists have been worst hit, with over-65s paying 10% more than a year ago, while over-50s have seen premiums rise by 8.9%.
Cheap cover needn't be poor cover
The cost of motoring has sky-rocketed in recent months, and while there’s nothing you can do to curb the ever-rising fuel price, you can at least act to cut your insurance premiums.
"Given that premiums are rising and the cost of driving is now at its highest for a number of years, it is all the more important for motorists to shop around for competitive insurance,” says Sainsbury's Car Insurance manager Joanne Mallon.
“However, accepting a lower premium does not mean that you have to sacrifice quality cover - by shopping around you can find both. Just make sure, when comparing car insurance policies, that you do this on a like-for-like basis."
| Age | Average premium July 2007 | Average premium December 2007 | Average premium June 2008 | Annual % change |
| All motorists | £486.13 | £497.26 | £514.36 | 5.81% |
| 17-24 | £1,219.47 | £1255.99 | £1,249.56 | 2.47% |
| 17-39 | £602.43 | £617.14 | £632.73 | 5.03% |
| 40-49 | £378.02 | £387.03 | £401.93 | 6.33% |
| 50+ | £319.06 | £332.80 | £347.45 | 8.90% |
65+ | £334.65 | £353.53 | £368.09 | 9.99% |
So what can you do?
We have put together a few handy tips to help you locate a better deal on your car insurance.
Never simply renew: If your current policy is about to expire, avoid the temptation to renew without out shopping around, as insurers tend to reserve their best rates for new customers.
They charge existing customers higher rates and hope that inertia will keep you in the net. As a rule, loyalty is seldom rewarded in the world of insurance, so always shop around.
Shop online: Insurers offer hefty discounts of up to 20% when you buy your cover online. Just make sure you fill out your application form carefully, as small errors can be costly to fix. For example, many insurers charge an ‘amendment fee’ of up to £25 just to correct a spelling mistake in your name or address on the policy.
Pay up front: When you buy insurance, you will be given the option to pay for the year’s cover up front, or by monthly instalments. While the latter may be tempting, it’s also far more expensive, as most insurers will charge you an obscene rate of interest on the outstanding debt (often above 20%).
If you can’t afford to pay for your cover up front, you can always put the policy on a credit card that charges no interest on new purchases for a year, such as the Capital One Platinum credit card, and pay that debt off monthly.
Factors affecting your car insurance costs
- Several factors will affect the price of your car insurance, which are worth noting.
- Your age and sex
- Who drives the car
- Make, model and value of your car
- Location
- Your no claims bonus
- Your driving history
- Is your car used to commute?
- Insurance providers will match your insurance to your driving profile. |
