The average cost of car insurance premiums for young male drivers has finally broken through the £4000 barrier.
A male driver, on a year’s comprehensive cover, between the ages of 17 to 20, can expect to pay on average £4006 a year according to figures from actuaries Towers Watson and car insurance comparison site Confused.com.
Currently, the cost for the same insurance policy for women in the same age group is just over half of that at £2151. However this will be set to change also in December 2012 when gender is removed as a risk factor in calculating car insurance premiums.
Over the last three months, the average cost of comprehensive car insurance cover in the UK has risen by £22, to a total of £858 according to figures from MoneySuperMarket.com. This is £170 higher when compared with the same figures this time last year.
These figures mean that for a young male to run a car, on average they would have to spend £6500 a year, which is almost half the average salary of full-time employees in the same age group. Take into consideration the start-up cost of the vehicle, and other added factors, and costs can really mount up. For example if a driver wanted to add a personalised registration plate such as M155 B, they can expect to pay another £1000.
Experts say that young male drivers are the highest risk drivers on the roads, and this is reflected in their car insurance premiums.
However, the rise in insurance costs is attributed to a number of factors, including a rise in insurance fraud. Measures are now being introduced to combat insurance fraud, including a dedicated police fraud unit and a new industry-wide fraud database. Insurance industry insiders hope that these measures will drop the number of cases in insurance fraud, bringing about a drop in premiums.
According to the Association of British Insurers, the value of detected fraud amounts to 17.5m per week, an increase of 9% over the previous year.
Industry experts believe now that in the short-term we will see a decrease in the numbers of young people taking driving tests, and on the roads, as the cost of driving prices youngsters out of the motoring market.
Ian Donaldson, Managing Director of Autonet Insurance, said, “Although the figures look bleak, young male drivers can look to save money on their car insurance by shopping around for their cover.”
By Ben Malkin
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