Car insurance costs rocket - how can you keep your premiums down?

Bills up £88 on last year

Stressed Driver Sitting At Roadside After Traffic Accident looking at the damage

Drivers are paying nearly 20% more for their car insurance than they were two years ago, an analysis of 27 million car insurance quotes has revealed.

During April and June this year, says MoneySuperMarket, premiums averaged £562, £88 up on 2015 and £51 more than last year.

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There are two main reasons for the increase. First, the government raised insurance premium tax earlier this year, taking it from 10% to 12%.

Second, there's also been a change to something called the Ogden discount rate, also set by the government, which is used to calculate the lump sum compensation paid to people who have suffered life-changing injuries. It's costing the industry millions of pounds - which is being passed on to consumers.

"These are grim times for motorists as far as their insurance is concerned. It is to be hoped the Chancellor resists the temptation to push IPT higher in the autumn, but nobody would be surprised if he did," says Kevin Pratt, consumer affairs expert at MoneySuperMarket.

"We should also look for quick and meaningful reform to the way the Ogden rate is calculated so that a fairer outcome is achieved for personal injury victims and insurance buyers."

In the meantime, of course, you'll just have to pay up. So how can you keep your insurance premiums down?

First, it's a good idea to keep your no-claims bonus, even if it costs you more in the short term. The survey revealed that drivers with five or more years' no-claims discount are paying just £347 on average between, whereas those without a no-claims bonus fork out £1,271.

Increasing your excess so that you pay more of the cost for an accident will also get your premiums down, and you shouldn't add any more drivers to the insurance than you need to - especially not young ones.

Keep your car safe, in a drive or a garage if you can, and try and keep your mileage down. You could even consider signing up for a black box, which rewards motorists who don't drive often and who drive carefully.

Finally, always shop around for the best deal - you could save hundreds of pounds.

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