News today reports that car insurance premiums are expected to rise across the board as second-hand car prices drive up claims costs for insurers.
Louise O’Shea, CEO at Confused.com comments:
“The cost of car insurance has dropped significantly over the course of the year. However, we are now starting to see prices increase in some areas of the UK, with costs for some drivers now £23 more expensive in the last quarter compared to the previous three months. And this is arguably down to the fact that we are spending more time on the road and therefore the likelihood of claims being made will increase.
“Now we’re seeing reports of the value of cars increasing, with our data suggesting the average cost of a five year old vehicle now 23% more expensive than 12 months ago. And this is going to force insurers to put up the cost of insurance. When an insurer prices insurance, they take into consideration the cost of replacing or fixing the car, and the higher this is, the more the premium is going to be.
“So, while drivers are enjoying cheap premiums at the moment, it’s really important to bear in mind that when it comes to renewing in the coming months, there is a chance their price will increase.
“In addition to this, it’s important to remember that the FCA changes that are coming into effect from January will not guarantee them a cheaper renewal premium. While insurers will be prohibited from pricing new and renewing customers differently, if the average cost of car insurance in the UK is higher than it was the previous year, then chances are the renewal will increase too.
“Things will get competitive, and it’s highly likely there will be insurers out there who will be able to give you a better price, even if your renewal price is in fact cheaper. When we see premiums increase, which is unfortunately inevitable because of an increase in the severity of accidents and therefore higher claims costs, shopping around for your insurance will be the easiest way to save money.”
Help keep news FREE for our readers
Supporting your local community newspaper/online news outlet is crucial now more than ever. If you believe in independent journalism, then consider making a valuable contribution by making a one-time or monthly donation. We operate in rural areas where providing unbiased news can be challenging. Read More About Supporting The West Wales Chronicle
