Impounded Car Insurance UK look at how the latest budget figures will affect car insurance prices.
Insurance premium tax currently stands at 6%. The costs of the increase to 9.5%, from November 2015, will be paid directly by consumers. The added tax will contribute around £8 billion into the treasury over the next size years.
Every motorist will be affected by the rise in IPT with between £12 and £15 being added to an average car insurance policy. As the tax is percentage based, people that pay more for their car insurance will be hit with a bigger increase. Younger drivers are likely to be hit hardest as their car insurance premiums are already some of the highest; they will see around £50 added to their policies.
Drivers that have convictions will also be hit hard by these increases as their premiums are also typically higher than the national average.
This IPT increase also affects other types of insurance, such as home insurance and travel insurance. This means that an average two car house may see their yearly insurance bill rise by around £35.
Some industry experts are warning that further increasing car insurance costs may lead to an increase in the number of people driving whislt uninsured. Whether this will be the case remains to be seen, but the increased number of seized car insurance queries that we have recently seen indicates that there are already more cars being impounded in recent months.
