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Car insurance and maintenance costs have increased the most say consumers

The price of car insurance has been named by drivers as the motoring cost that has increased the most in the past 12 months and their number-one cost-of-motoring concern. Car maintenance bills was judged second.

Research for the RAC Report on Motoring 2016 has revealed almost half (46%) of the 1,714 motorists surveyed for the report said their insurance costs have increased since last year compared with 34% who said the same in 2015.

Average premiums rose by 14% in the 12 months to March 2016, from £590 to £671 per year.

The cost of car maintenance bills was deemed to have suffered the second biggest rise in the last year with 41% of motorists saying they had experienced increased maintenance costs, a slightly smaller proportion than in 2015 (41% versus 44%).

A total of 8% of respondents listed insurance bills as their top motoring concern in 2016, compared with just 5% last year.

When asked to identify their top motoring concern, the cost of insurance came out third in the ranking, behind only the condition of local roads (14%) and drivers using handheld phones (13%). And significantly, around a quarter of motorists (26%) say insurance prices are one of their four most serious concerns this year compared to only 18% in 2015.

A number of factors have helped to push up insurance costs including the decision by the Government to increase the rate of insurance premium tax (IPT) to 9.5% from 6% last autumn, and then to 10% in the March 2016 budget.

This second increase is due to kick in on Saturday.

The other factors that have led to a rise in average premiums are: the increasing amount of low-value personal injury claims; a growing number of claims due to the fact people are driving more because of low fuel prices; and the increasing cost of accidental damage repairs as a result of cars becoming ever more complex.

RAC Insurance director Mark Godfrey said: “The cost of insurance has never ranked as highly among motorists’ concerns in previous years’ research for the Report on Motoring as it has this year, and neither has it featured as prominently in motorists’ assessment of increased motoring costs.

“Sadly, a variety of factors are causing premiums to go up, from a higher volume of claims due to more miles being driven to more expensive repair costs.

"Repair bills are higher due to the ever-increasing complexity of vehicles meaning, for example, that a dent to a bumper, which a few years ago would have been simple and cheap to repair or replace, is now often far more expensive as the bumper incorporates parking sensors.

“The issue of spurious whiplash personal injury claims unfortunately continues to add cost to premiums.

"The Government announced proposals to tackle this issue in last year’s autumn statement alongside the further increase in insurance premium tax.

"We do not believe that these proposals will necessarily get to the heart of the issue and nearly ten months later we are no further forward as the promised industry consultation to address the issue has not yet begun. We need the Government to push forward on consultation to get to a concrete set of changes that will deliver a reduction in such personal injury claims.

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