Experts are calling on the Government to make changes to reduce car insurance prices for drivers after costs reach record highs.
The average price of motor insurance was a record £561 in the third quarter of 2023, according to the Association of British Insurers (ABI).
This represents a staggering increase of 29 per cent compared to the same time last year, following the analysis of almost 28 million policies.
Drivers continue to be hammered by expensive car insurance premiums, with a cost increase of nine per cent in the last three months alone.
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Prices for insurers have also been increasing, with key items rising in price, including paint by 16 per cent and spare parts up 11 per cent.
The ABI is now working with the Society of Motor Manufacturers and Traders (SMMT) and Thatcham Research to understand areas of share concerns between manufacturers and insurers.
The 29 per cent increase in the price of car insurance is way above the general rate of inflation.
In response to the soaring costs, the ABI is calling on the Government to reduce the rate of Insurance Premium Tax (IPT) to help drivers.
IPT makes up 12 per cent of every premium, with calls for this to be reduced in the Chancellor’s upcoming Autumn Statement on November 22.
It has been estimated that this change could save motorists up to £60 on the average premium.
The tax is applied to most forms of insurance including motor, home, pet and health, and made around £7.45billion for the Government last year.
Mervyn Skeet, ABI Director of General Insurance Policy, said: “We appreciate that another quarter of increased motor insurance premiums will be concerning for households who are already grappling with rising costs in other areas.
“Insurers continue to do all they can to keep motor insurance as competitively priced as possible, despite facing substantial increases in costs outside of their control.
“We're bringing together representatives from across the sector to discuss issues such as vehicle safety and security.”
He added that the Government could introduce an immediate reduction in costs, with drivers urged to shop around and find the best policy for them.
Other recommendations for drivers include increasing their voluntary excess, improving the security of their car and taking an advanced driving course.
The ABI is advising motorists to speak to their insurers to understand what measures they can take to improve safety and if there are any other options to reduce their premiums.
Mervyn Skeet continued, saying: “But be sure to choose a policy that meets your needs, not just based on price.
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Drivers may be able to reduce costs by taking an additional driving course
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“If you’re struggling to pay your premium, speak to your insurer who may be able to help.”
