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Electric cars push up insurance costs for older drivers

Older drivers have been hit with steeper increases to car insurance premiums than younger motorists thanks to the number of over-55s now driving expensive electric cars.

The average motor insurance premium increased 7.8pc over the last year, with the typical policy now costing £786, according to analyst Consumer Intelligence.

However drivers over the age of 50 had been stung by the highest increases, with premiums rising by 9.4pc on average, compared to drivers aged under 25, whose premiums fell by an average of 3.2pc despite being statistically more likely to have an accident.

Experts said the rise was due to older drivers purchasing electric cars, which are typically more expensive than petrol models and cost more to insure.

A survey by insurer Saga found 54pc of drivers aged 55 and over were now considering switching to an electric vehicle, with recent petrol cost rises as the primary reason, rather than concern for the environment.

However electric cars cost more to repair and Kevin Pratt of Forbes Advisor, the comparison website, said insurers were passing on these costs to customers.

“Electric vehicles are popular among older drivers, but there still isn’t an extensive network of garages in the UK that can deal with them,” he said.

Younger drivers still pay more on average than those over 50, with under-25s typically paying £1,669 for their car insurance, compared to £414 for older drivers. Motorists aged 25 to 49 now pay £592 on average – an increase of 6.4pc on last year.

Prices rose in January after the City watchdog, the Financial Conduct Authority, banned companies charging existing customers more than new policyholders. Inflation has also been blamed for rising insurance costs, as higher repair costs have also been passed on.

Though the 7.8pc increase still lags behind the current 9.1pc rate of inflation, Mr Pratt said there was a “lag” in costs being passed on, and drivers should expect premiums to rise even further.

“Premiums we’re seeing now will reflect claims expenses from previous months, so there’s a lag between insurance premiums and inflation, so it will continue upwards,” he said.

“When your car goes in for a repair, the bill is higher than it used to be. While insurance companies foot the bill, the increased cost will be reflected in the rates they’re charging.”

Mr Pratt said further increases to insurance premiums are “inevitable” as prices catch up to the rate of inflation. The fall in prices for younger drivers has been attributed to many young people abandoning their cars altogether due to rising fuel costs. The RAC estimates petrol currently costs around £1.91 per liter.

Mr Pratt said: “If you’re under 25 maybe you might not be able to afford to run a car, let alone pay for insurance.”

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