The cost of car insurance in parts of the UK has soared by more than 12 per cent over the past year, new figures reveal.
The price of comprehensive cover across the whole of Britain increased by an average of 12.3 per cent to £843 in the year to September, according to the latest Confused.com/Towers Watson Car Insurance Price Index.
This is more than twice the Consumer Prices Index (CPI) inflation rate of 4.5 per cent.
But a number of areas, predominantly in the north of England, have been hit significantly harder. In Oldham, greater Manchester, for example, typical premiums were up 27.9 per cent to £1,437.
Prices in Bradford and Liverpool have risen by around 27 per cent over the past year, to reach averages of £1,394 and £1,383 respectively.
Price rises 'worrying'
Gareth Kloet, head of car insurance at Confused.com, said: “The year-on-year picture is quite worrying as some drivers are being hit with more than 25 per 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 price of third-party, fire and theft cover has risen even more sharply over the past 12 months, with a typical 19.9 per cent rise across the UK.
To get an idea of how car insurance prices in your area have been affected, take a look at our interactive guide.
Areas with lowest rises
Some parts of the country, Scotland in particular, do appear to have escaped the worst of the price increases, showing only modest rises since last year.
In Perth, the cost of a typical comprehensive policy increased by just 0.3 per cent between September 2010 and September 2011.
Edinburgh, Motherwell and Dumfries all recorded rises no greater than 2.5 per cent, well below the rate of inflation.
Could price rises be coming to an end?
But although the year-on-year cost increases remain high, the current period of motor-insurance price rises may be coming to an end, the statistics suggest.
In the three months from July to September this year, the average cost of a comprehensive actually fell by 1.6 per cent, the first quarterly decrease for more than three years.
This period of high car insurance price inflation has been blamed on a rise in the number of uninsured drivers, as well as increasing costs faced by insurers in dealing with personal injury claims resulting from road-traffic accidents.
How to cut the cost
Despite the rising figures, there are a number of ways you can look to lower your car insurance costs.
Don’t overestimate your mileage
Mileage is one of the rating factors insurers use to calculate a person’s premium so it pays to spend a little time trying to estimate as best as you can how many miles you’re likely to drive each year. But bear in mind that underestimating your mileage could invalidate your insurance policy when it comes to making a claim.
Higher excess, lower premium
Consider a higher voluntary excess to cut your annual premium. This is an amount you choose to pay in the event of a claim. In return for opting for a higher excess, the insurance provider will usually lower the premium. But don’t forget that the voluntary excess will always be paid in addition to any compulsory excess.
Value your vehicle accurately
It’s incorrect to assume the higher you value your car the more money you’ll receive in the event of a claim. Insurers will only pay out the current market value of the vehicle so inflating the value of your vehicle serves no purpose other than increasing your car insurance premium.
