Cheap car insurance hopes dashed as prices keep rising

The cost of comprehensive car insurance has jumped by just under £1.50 a week in the past year. Drivers are hit the worst in Oldham, Bradford, Liverpool and Manchester, who are paying at least 25 per cent more, a survey by and Towers Watson Car Insurance for the three months ending September 30 has revealed.

The average increase across the country is 12.3 per cent – a rise in premiums of £92 in 12 months.

Bradford drivers have to fork out an extra 27.5 per cent year-on-year rise in the cost of average comprehensive cover.

In Oldham, motorists are even worse off with a 27.9 per cent year-on-year increase.

Prices are also up significantly in Liverpool, Manchester and Ilford, Essex.

Third party, fire and theft cover has also shot up by a fifth (19.9 per cent), equating to an increase of £192 –  or £3.69 a week – over 12 months.

The average premium rise of 12.3 per cent year-on-year is significant when compared to the Consumer Price Index which currently stands at 4.5% – making car insurance price rises outpace inflation by around 300 per cent.

The average comprehensive car insurance premium is £843. 

Despite the year-on-year increases, the average price of a comprehensive car insurance fell by 1.6 per cent in the third quarter of 2011 – the first quarterly decrease for over three years.

Gareth Kloet, head of car insurance for said: “The year-on-year picture is quite worrying as some drivers are being hit with more than 25per cent increases. Car owners in the affected areas are going to have to be as savvy as ever to find the cheapest and best deals for them by shopping around.” 

The areas with the highest insurance increases match those blamed for the most crash-for-cash fraud schemes and uninsured drivers.

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