HARD-HIT motorists saw their car insurance premiums soar by a third at the end of last year, it was revealed yesterday.
The Association of British Insurers said the average paid by drivers for cover between October and December was £620 — up from £470 in the same period in 2022.
Insurers blamed the hikes on their rising costs, such as longer repair times and the increased price of replacement vehicles.
Repair costs have also soared due to higher wages and energy costs and the increasing sophistication of motors.
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Mervyn Skeet, director of the ABI which analyses nearly 28 million policies a year, said: “We’re acutely aware of the impact that rising motor insurance premiums continue to have on motorists.
“Rising repair costs and other factors outside of insurers’ control mean there is no single action that could bring down premiums.
"However, we are absolutely determined to do all we can to put the brake on.”
Consumer group Which? said the problem was made worse by the extra cost of paying monthly instead of up-front annually.
Drivers can end up forking out hundreds of pounds more in interest payments, despite many being less resilient financially.
Director Rocio Concha said financial watchdogs “should take immediate action against providers found to be charging monthly customers excessive interest rates.”
Mr Skeet added: “The cost of paying monthly is one of a number of topics we continue to discuss with the Financial Conduct Authority.”
He added that Insurance Premium Tax adds around £67 to the average motor premium, saying: “It is levied on insurers but the cost is passed on to customers through the prices they pay.
He said cutting the tax “would provide immediate relief for stretched consumers”.
