Young drivers facing steepling premiums
Quarterly data released today has revealed that young drivers shouldered hefty car insurance premium increases from July to September 2017.
According to UK price comparison website, MoneySuperMarket, young drivers (aged 17-19) on a fully comprehensive policy saw an increase of six per cent, from £1,321.53 to £1,405.00, while those on a third party policy saw an increase of two per cent, from £2,606.56 to £2,664.56.
Young drivers on a third party fire and theft policy saw an even bigger increase of seven per cent from £1,571.66 to £1,687.87.
Taking the market as a whole, fully comprehensive policy premiums decreased by two per cent from £562 to £551. This reduction suggests that insurers are already reacting to the government’s decision to look again at the proposed change to the discount rate. It has conceded that the move to minus 0.75 per cent was too severe and has signalled that it will instead stand at between zero and one per cent.
Of the three main factors affecting premiums in 2017 – changes to the discount rate applied to claims pay-outs, the increase in June to insurance premium tax (IPT) and fraudulent claims – the first two impact young drivers disproportionately.
Kevin Pratt, consumer affairs expert at MoneySuperMarket, said, ‘Young drivers are in despair about the spiralling cost of car insurance, with policies often costing more than the car they are driving. One potential money-saving option is to investigate ‘black box’ insurance, where insurers track driving behaviour via satellite and reward safer drivers with lower premiums.
‘Everyone, regardless of age, should refuse to settle for the quote they get from their existing insurer, since firms usually reserve their best prices for new customers. Those who haven’t changed insurer for a number of years are likely to find a much cheaper quote if they shop around at renewal.’