Insurers are piling on the charges for mums and dads who try and save some cash by putting their children on their policies as named drivers.
Most drivers saw an increase in the cost of car insurance, but the biggest shock was for parents in their early 50s who saw the price of comprehensive cover go up 43% in 2010.
Many families see no way out of the problem. Male drivers under 25 have to pay out more than £1,500 just for basic third party, fire and theft (TPFT). To keep costs down, parents add their sons and daughters to their own policies and face a massive increase in premiums as well.
Drivers pay an average £695 for comprehensive insurance, but prices vary widely between postcodes – which is an increase of £45 in the past three months and £192 during 2010 while the average TPFT premium is £893.
Premiums vary across the country
Manchester and Merseyside saw an 11% increase in the last three months of the year – contributing to an annual rise of 49% – the highest in the UK. Other areas with annual cost increases of more than 45% were Inner London and Leeds/Sheffield.
Inner London has the highest average premium at £1,061. Central Scotland has had the lowest or second lowest rate of increase in four of the last five quarters.
Bradford, Bolton and East London have had the biggest annual rates of increase for comprehensive cover. Drivers in Kirkwall, Reading and Motherwell pay the lowest.
The cost of car insurance, rising fuel prices and the hike in VAT are leaving some motorists with painful financial decisions.
“Increases in car insurance costs on the scale witnessed in the past 12 months are likely to be a factor in putting many household budgets under pressure. The effect of them, plus the recent 1% increase in Insurance Premium Tax and rising fuel costs can only emphasise the need for value in purchasing decisions,” said Will Thomas, confused.com head of motoring.
EMB is an international insurance consultancy