Car insurance premium costs skyrocket in the UK and this is the controversial reason why
CAR insurance costs for young drivers have skyrocketed over the past year after the introduction of new government taxes and changes to polices.
Car insurance premium costs are skyrocketing in the UK for young drivers
Car insurance costs have skyrocketed over the past year due to the introduction of new controversial taxes and changes to policies.
An increase from 10 per cent to 12 per cent on Insurance Premium Tax and a change to the Ogden discount rate is among the reasons premiums are skyrocketing.
The Ogden discount rate is used to calculate personal injury compensation pay-outs.
Figures published by comaprthemarket.com suggest that 17 to 24 year-old drivers are paying eight per cent more on their car insurance premium year on year.
On average they are required to pay a premium of £1,354 per year to insure their vehicle.
The price of insurance remains the single biggest cost for young drivers by far
It’s not just the cost of car insurance that is crippling drivers as the average overall vehicle running costs as calculated to be £2,379 a year which has increased three per cent year on year.
John Miles, head of motor at comparethemarket.com, said: "The price of insurance remains the single biggest cost for young drivers by far and the cost of cover continues to rise rapidly."
"These past six months have seen the first positive change for young drivers in a long time.
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“However, because the fall is due to lower fuel prices, there is no guarantee that this trend will last over the longer term."
Despite the year-on-year rise, young drivers car running costs ahem fell over the past six months by 0.75 per cent.
The cost of fuel has also dropped cutting around £70 off the average £811 fuel bill.