Car insurance prices hit two-year high

The cost of car insurance has hit a two-year high, according to new figures.

An average car insurance premium has now reached £815 following a £41 increase over the last 12 months – the highest rise in prices for two years.

In fact, premiums have risen by £32 in the past three months, which represents the biggest quarterly increase in more than two years.

It means that premiums are now nearing closer to the 2011 peak of £858, with motorists paying just £43 less than this for an average yearly premium.

Female drivers have been hit particularly hard by the increase, having to now pay £48 more than 12 months ago. It means that female drivers can now expect to pay £767 for their insurance on average, but these still stay lower than those for male drivers who have experienced a £37 increase year-on-year and now pay £854 per year on average.

Certain younger drivers have also felt the brunt of the increases. 18-year-old drivers searching for insurance will have seen rises of £147 in 12 months, resulting in a £2,130 average premium cost. Prices for 19-year-old and 17-year olds also increased by £137 and £116 respectively.

Increases have been experienced across the board regardless of age, with older drivers aged 38 and 60 paying the most for both these age groups.

Louise O’Shea, Confused.com chief executive, which compiled the data, said: “It’s January, the month to save money and re-evaluate our spending. But the bad news is car insurance costs are increasing. And, as drivers, this is something we can’t avoid. If costs continue to accelerate at this pace, we could be paying record prices by the end of the year.

“Shopping around is key to saving on car insurance. And even if your renewal price is cheaper, or the same, it’s likely there will be another insurer out there willing to offer a better price.”