Tax rises will result in bigger insurance costs

Insurance premiums have increased by 19 per cent within the last year

 

According to a car insurance index, motoring costs are expected to increase in 2016 as figures show that insurance premiums have risen by 19% in the last 12 months.

The increase has been blamed on the Insurance Premium Tax rise introduced by ex-Chancellor George Osbourne in November 2015.

The 3.5% tax increase to 9.5% will increase further to 10% in October. The tax rise should be shouldered by car insurance companies, however, it is expected they themselves will increase premiums to counteract the tax increase.

Car insurance premiums are set to increase further following 19% rise

The figures from Confused.com

 

The 19% rise within the last 12 months has resulted in an average increase of £115 per yearly insurance costs. This is the biggest rise recorded since 2011, according to the Confused.com figures, which also suggest that male drivers over the age of 61 have been most affected.

Male motorists over 61 have experienced an insurance premium rise of 24% within the last year. The average yearly comprehensive cover for males in this age bracket now costs £418. However, this is still comparatively low compared to the national average of £715.

The national insurance premium average for female drivers currently sits at £664; while the average for male drivers is £756. A difference of £93.

Surprisingly, younger drivers aged 17 have experienced the lowest increase of eight per cent. However, considering the already high premium for this age, which now stands at £2,013, an increase of any amount equals bad news.

Amanda Stretton, motoring editor at Confused.com, commented: “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.”

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