Owning a car is now £500 more expensive

Insurance premiums rose earlier in the year when the Financial Conduct Authority, the city’s watchdog, banned the so-called “loyalty penalty,” preventing insurers from offering cheaper deals to new customers at the expense of old ones. They renewed their policies.

Louise O’Shea of ​​Confused.com, a comparison website, said: “The main reason auto insurance costs are starting to rise is that we drive a lot more now than we did 12 months ago. This means that the number of claims being paid by insurers is also likely to have increased.

“It is concerning that so many people believed that the price changes that went into effect in January would guarantee them a lower price, and I have no doubt they were very surprised when they received the renewal notice and it was higher.”

Costs vary depending on where you live. Drivers in central London pay more for their insurance, averaging £864 a year, according to Confused.com, while motorists in the Scottish Borders pay £370.

Older drivers have been disproportionately affected by higher auto insurance costs, with premiums for those over 50 rising faster than any other age group. Prices for older drivers have increased 6.2% in the last three months, according to Consumer Intelligence, while motorists ages 25 to 49 saw increases of 4.1%. For their part, the average premiums for those under 25 years of age fell by 2.3%.

Ms O’Shea added: “It’s very likely that there is another insurer that can offer a better price for the cover you need, so it’s essential to shop around.”

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