Young motorists paying more for car finance
10/10/2006
Young drivers are paying more for their car finance, with car insurance premiums for third party, fire and theft rising 4.62 per cent in the third quarter of 2006.
According to the AA British insurance premium index, this resumes the continuing trend of increased car insurance premiums for young people following a drop in prices in the previous quarter.
In general, the average annual comprehensive car insurance premium rose by 1.24 per cent during the last quarter.
Last month, Norwich Union became the first insurer to raise its premiums, with others expected to follow in the coming months, according to AA Insurance.
"It has long been clear that the increasing cost of meeting both accident damage and personal injury claims would eventually have to be absorbed by increased premiums," says Kevin Sinclair, managing director of AA Insurance.
"The increase is long overdue. Premiums have been kept artificially low by the entry of new insurers seeking market share and the growth of internet sales."
Mr Sinclair adds that a number of companies will hold back their premiums in order to achieve short-term gain, but eventually companies will follow Norwich Union's lead and raise prices as well.
Last week, Norwich Union introduced the first ever pay-as-you-drive insurance scheme, which incorporates the use of black-box technology.
According to the AA British insurance premium index, this resumes the continuing trend of increased car insurance premiums for young people following a drop in prices in the previous quarter.
In general, the average annual comprehensive car insurance premium rose by 1.24 per cent during the last quarter.
Last month, Norwich Union became the first insurer to raise its premiums, with others expected to follow in the coming months, according to AA Insurance.
"It has long been clear that the increasing cost of meeting both accident damage and personal injury claims would eventually have to be absorbed by increased premiums," says Kevin Sinclair, managing director of AA Insurance.
"The increase is long overdue. Premiums have been kept artificially low by the entry of new insurers seeking market share and the growth of internet sales."
Mr Sinclair adds that a number of companies will hold back their premiums in order to achieve short-term gain, but eventually companies will follow Norwich Union's lead and raise prices as well.
Last week, Norwich Union introduced the first ever pay-as-you-drive insurance scheme, which incorporates the use of black-box technology.
