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Insurance costs rise by 8% for young motorists

By Ravender Sembhy

Car insurance costs for young drivers have rocketed over the past year as a result of controversial government tax and policy changes.

Figures compiled by comparethemarket.com show that on average, a 17-24 year-old UK driver now pays £2,379 to run a car in the first year of driving, up 3.4% year on year.

Of that figure, car insurance accounts for more than half of the cost, with youngsters forking out on average £1,354 for cover, an increase of 8%.

The rise can be partly attributed to a range of Tory policy changes forcing insurers to hike prices.

A change to the Ogden discount rate - used to calculate personal injury compensation payouts - alongside a hike in Insurance Premium Tax (IPT) from 10% to 12% has had a "significant impact on insurance premiums", the report said.

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