Could comparison websites be causing a rise in car insurance costs?

Comparison websites are meant to create competition and reduce costs, but there’s a chance they could be having the opposite effect when it comes to car insurance premiums.

Because comparison sites make it easier for people to hunt out bargains, plenty of insurers are no longer offering loss-leading introductory insurance offers and some are even putting their prices up to try and prevent motorists hunting out new deals and leaving their existing insurers once their policy expires.

New analysis by the AA of the British Insurance Premium Index has shown the average cost of yearly comprehensive cover has increased to £568 in the three months leading up to July 2016 – a rise of £12.50.

In 2015, the average price for five of the lowest quotes from comparison websites was £484.86 – a hike of £84. To exacerbate the situation, experts think the figures will continue to rise.

The AA’s director of insurance Michael Lloyd said: “Premiums haven’t risen quite as much in the second quarter of 2016 as some people predicted but there is still a trend for increases which I expect will continue into Q3 and Q4.”

Other reasons for the rise include a hike in the Insurance Premium Tax (IPT), which has risen by 67 per cent in the first three months of 2016.

Despite the trend for comparison sites causing increased prices, there is one car comparison company which is helping motorists to make money – Wizzle!

Our app allows you to accurately appraise your car and transmit the details directly to dealers, who are looking for your exact make, model and age of car.

Once your car has been broadcast to the dealers, they send you offers which you can then compare, which helps you to get the best price for your vehicle. Why not download our app and see how we can help you?