News released this week indicates some potentially bad news for drivers of high-end or expensive cars; car insurance premiums are set to increase again, potentially bringing the UK average rate to over £700 in the next few months.
A report released by comparethemarket.com says a record gap between the average and cheapest deals on the market could have been caused by a lack of competition. The ‘savings variable’ price gap grew to £118 between June and August 2016, pushing the cost of the average car insurance premium to £697.
Basing predictions on the continuation of current trends, the company reported the average premium could rise to a cost of £739. While shopping around for better car insurance deals could help reduce price increases, even the cheapest deals have increased by almost £70 in the past 12 months alone.
The report said: “A rise in incidents such as staged car crashes, rising repair bills, and insurance scams are just some of the reasons why premiums have risen as insurers look for ways to absorb increased costs.”
In addition to the reasons above, the report suggested another reason for the price hike could be the increase in Insurance Premium Tax, which was introduced over the past year.
Head of motor insurance at Comparethemarket.com, Dan Bass, commented on the average price increase stating it was clear to him that insurers were “not feeling any competitive pressure to reduce their prices”.
While this is likely to affect a huge number of car owners across the UK, it could be considerably more costly for owners of high-end, luxury cars. While the cost of running cars in this category are often high already, increased insurance premiums may push some owners over the edge of being able to run their car affordably.
If you decide that increased insurance premiums may make you want to trade your car out for something cheaper to own and insure, be sure to get a free online car valuation from webuyanycar.com.
Use our online valuation tool here for your instant valuation.