Older drivers hit with steeper car insurance premiums than younger drivers thanks to the number of over-55s now drive expensive electric cars.
Average car insurance premiums have risen 7.8 percent over the past year, with the average policy now costing £786, according to analyst Consumer Intelligence.
However, drivers over the age of 50 were stung by the highest increases, with premiums rising an average of 9.4 percent, compared to drivers under 25, whose premiums fell by an average of 3.2 percent, although the chance of an accident was statistically greater.
Experts said the increase was due to older drivers buying electric cars, which are typically more expensive than petrol models and cost more to insure.
A survey by insurer Saga found that 54 percent of drivers aged 55 and over are now considering switching to an electric vehicle, with recent increases in petrol costs as the main reason, rather than environmental concerns.
However electric cars cost more and Kevin Pratt of Forbes Advisor, the comparison website, said insurers passed these costs on to customers.
“Electric vehicles are popular among older drivers, but there is still no extensive network of garages in the UK that can handle them,” he said.
Younger drivers still pay on average over 50s, with those under 25 typically paying £1,669 for their car insurance, compared to £414 for older drivers. Motorists aged 25 to 49 now pay an average of £592, an increase of 6.4 percent from last year.
Prices rose in January after the City Watchdog, the Financial Conduct Authority, banned companies from charging existing customers more than new policyholders. Inflation is also responsible for rising insurance costsbecause higher repair costs have also been passed on.
While the 7.8 percent increase still lags the current 9.1 percent inflation rate, Mr Pratt said there has been a “slowdown” in cost pass-through, and drivers should expect premiums to rise further. .
“Premiums we’re seeing now will reflect previous months’ claim costs, so there’s a lag between insurance premiums and inflation, so it’s going to keep going up,” he said.
“When your car comes in for repair, the bill is higher than it used to be. As insurance companies foot the bill, the higher costs will be reflected in the rates they charge.”
Mr Pratt said further increases in insurance premiums are “inevitable” as prices catch up with inflation. The drop in prices for younger drivers is attributed to the fact that many young people have abandoned their cars altogether due to rising fuel costs. The RAC estimates that petrol currently costs around £1.91 per litre.
Mr Pratt said: “If you are under 25 you may not be able to afford a car, let alone pay for insurance.”