In the space of a year, the average car insurance premium has increased by 5.24%(1). The latest Sainsbury’s Car Insurance Index(1), which provides a comprehensive independent analysis of online car insurance premiums across the market reveals that in December 2007, the average car insurance premium was £497.26, compared to £472.52 in December 2006 (an increase of 5.24%).

The index reports significant differences in premium increases based on age in the last twelve months. Those motorists aged between 40 and 50 saw an average rise of 7%, the highest of any age group, higher even than the under 25s at 6.59%. Those motorists aged 65 and over saw the lowest rise in premiums at 4.14%.

Joanne Mallon, Sainsbury’s Car Insurance Manager said: ”Car insurance premiums continue to rise which makes it all the more important for motorists to shop around for competitive insurance. The trick is cutting your costs without cutting your cover. Comprehensive can be a loosely used phrase with some comprehensive policies not even providing courtesy cars as standard.

“Cover and benefits vary dramatically between insurers but unfortunately, as many as one in five motorists(2) only obtain one quote when they buy car insurance, many saying they can’t be bothered to shop around or that they don’t have enough time to do this. Missing out on a cost saving is one thing but not taking the time to make sure you’ve got good quality cover could turn out to be a major regret.

“When comparing policies do so with a like for like approach, there’s no point comparing apples and pears, it’s worth considering why the cheapest policy is so cheap, you may find you’re not just compromising on service but cover too.”

The Index reveals that men continue to pay more for their car insurance than women on average - £525.35 compared with £453.38, and that the most expensive cover is for those motorists aged under 25 where the average premium is now around £1,256. The average motorist aged over 50 pays £333, which is the lowest for any age group.

Mallon continues: “There are a number of factors leading to higher premiums, including a rise in the cost of personal injury claims and also repairs(3). However, given that nearly 70%(4) of us admit to some form of potentially dangerous activity whilst driving such as eating or using mobile phones, by cutting out these practices we can reduce the chances of being involved in an accident.“

(1) Price comparison figures based on independent research conducted by Consumer Intelligence December 2006 to December 2007. This was based on regular monthly monitoring - The Sainsbury’s Bank Car Insurance Index reviews prices from over 40 insurers representing at least 80% of market share.

(2) 967 people were interviewed by GfK NOP between 6th and 8th July 2007. Interviews were conducted over the phone. The consumer omnibus research conducted by GfK NOP uses a large sample size that reflects the demographic profile of GB. Given this it is possible to extrapolate figures and make projections from the research results within appropriate confidence intervals.

(3) Association of British Insurers
(4) 1,012 people were interviewed by TNS between 2ND and 6th August 2007. Interviews were conducted online. The consumer omnibus research conducted by TNS NOP uses a large sample size that reflects the demographic profile of GB. Given this it is possible to extrapolate figures and make projections from the research results within appropriate confidence intervals.