Car insurance premiums on the rise – but Scots still pay the least in the UK

‘Black box’ technology which rewards good driving increasingly being used to keep premiums low

Average car insurance premiums have climbed by 16.6 per cent in Scotland in the past year but Scottish drivers pay the lowest car insurance bills – less than half of London.

New research from Consumer Intelligence shows that, across the country, premiums rose 15.7 per cent – more than five times the rate of inflation – taking annual bills to £666 as new compensation rules come into effect. Nearly half the annual increase came in the past three months as the impact of the cut in the discount, or Ogden rate, which governs payouts in major personal injury claims, came into effect.

Younger drivers on average pay nearly double at £1,202 while drivers in London pay £1,000 a year on average compared to just £474 in Scotland. Average motor insurance premiums have increased by 34.6 per cent since October 2013, estimated Consumer Intelligence, whose data is used by the Government’s Office for National Statistics to calculate official inflation statistics.

Drivers aged between 21 and 24 pay the highest prices at £1,202 but have seen slightly lower annual premium increases at 13.1 per cent. Over-50s motorists are experiencing the biggest rises at 17.9 per cent but pay premiums of £418.

John Blevins, Consumer Intelligence pricing expert, said: “Price rises had been levelling off at the end of last year but are now rising rapidly as the full impact of the discount rate cut comes into effect.

“Government plans to review the Ogden rate have so far taken a backseat following the election, although there is some relief from plans to push ahead with whiplash reforms announced in the Queen’s Speech. However, with the impact of the latest Insurance Premium Tax rise still to come into effect, drivers need to shop around to limit increases in premiums.”

Premiums for 21 to 24-year-olds are rising slightly more slowly due to increasing use of telematics or black box technology. Around 62 per cent of the best-buy policies for young drivers are now telematics. The impact of telematics, which rewards good driving behaviour, is even spreading to older drivers – 11 per cent of the best deals for those aged 25-49 are from telematics and 8 per cent for over-50s.

0 Drivers in Scotland pay lowest fees