A consumer intelligence report published this week shows that UK car insurance costs continue to rise and have surged by 13% in the last twelve months according to new data. As of the end of August the average UK motoring premium stands at £788, which is a 13.5% increase over the same figures from last year. In addition to the percentage price rise, consumers will also see their bills increase slightly once more with an impending hike on the tax on insurance.
So just why is insurance becoming more and more expensive? To put it simply, the more advanced our cars get, the more expensive the repairs get. Back in the 90’s a hot hatch such as an XR2i could have a bumper to bumper collision with a Metro and the repairs would be minimal, maybe a dent here, a crease in a panel there, no great cost to anybody, however, our cars are becoming more and more sophisticated, replace the XR2i with a modern “hot hatch” such as a Golf R and the price to repair can explode exponentially. There are a multitude of sensors present in the front and rear of the car for cruise control, parking and other features, a jolt to the car could also impact the functionality of other sensors such as the rain sensors, then there are the aesthetic features of the car such as styling packs and chrome, it all adds up and is a far cry from the “hot hatch” of old. Replace the Metro with a Corsa SRi and again you have the styling of the vehicle to repair, if the impact is on the front of the car there is LED running lights, fog lights with chrome surrounds and other items which could be damaged.
Motoring on the whole has got a lot more expensive than it used to be and whilst there is still parity between the cost of Bentleys and Rolls Royces versus the cost of “normal” cars, every vehicle has become more expensive and therefore, more expensive to replace and repair. But, is the distribution of cost spread equally across the country? The short answer is no; drivers in the North West and London are paying up to 50% more than drivers in other regions, the average bill for a motorist here in the North West is £1,177, which represents a huge 17.3% increase over the last 12 months, drivers in London have been hit by a 16.7% increase to an average of £1,068.
Unsurprisingly, young drivers are paying the most for their premiums, with the average under-25 driver paying £1,831, although they pay the highest rate, they also pay the rate which is rising the slowest. Older drivers have been hit by higher rises, a typical example is a 15% increase over the year at an average cost of £348. Unfortunately, these increases look set to continue as more and more technology gets loaded onto our cars as standard meaning the cost of standard claims becomes inflated.
Green Cars’ is the term used for zero, low and ultra-low emission vehicles (ULEVs) - with pressure being applied to lower global emission levels, the need for “eco-friendly” vehicles is on the rise. Many countries now have plans in place to abolish the use of combustion engines before the turn of the century and so more and more vehicles we see on the roads will be Electric, hybrid or very low emission petrol and diesels.
Although beneficial to the environment, ‘Green Cars’ are also beneficial from a taxation view. The lower a vehicle’s emissions banding, the lower the taxation placed against it. Many manufacturers have tapped in to this ever-growing market with their own offerings, however, Volvo were the first manufacturer to state that every one of their models will be either electric or hybrid options from 2019.