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Drew Hendry: Time to change course on car insurance increases

By Drew Hendry

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Car insurance costs are much higher in the UK compared to countries in the EU.
Car insurance costs are much higher in the UK compared to countries in the EU.

When it comes to rising costs in the UK, it's a case of taking your pick.

There are plenty of choices, from paying more at the tills and higher household bills to increased mortgage and rent costs. Every aspect of our lives has become more expensive, and car insurance seems no different.

House of Commons library research shows that drivers' insurance costs in the UK have doubled, yet they've only risen across the European Union by 18 per cent. Meanwhile, in Ireland, car insurance is a fifth cheaper than it was nine years ago.

The Association of British Insurers cites energy inflation, increased material costs, and the cost of second-hand cars and courtesy cars as the main reasons for the rise of car insurance.

But that doesn't add up.

Why are UK drivers being asked to pay such exorbitant costs compared to our European counterparts? Is it another British problem of Brexit making or is there something else at play? More importantly, what is the UK government doing to address this glaring disparity?

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Well, I asked UK Treasury Minister Trott that very question in Parliament last week, and she seemed to be oblivious to the very real impact the situation is having on drivers, never mind giving a reasoned answer.

Surely, after five years of driving experience and a clean claims record, a young person should reasonably expect a reduction in car insurance costs. Yet, on average, a 22-year-old now pays £667 more annually than when they first got their license at 17.

Today's younger generation is already grappling with skyrocketing household expenses, dwindling chances of owning a home, and restricted travel options – thanks to the fallout from Brexit and Tory economic mismanagement. Adding rising car insurance costs to this list only further compounds the financial strain on those already struggling, exacerbating the inequalities perpetuated by failed UK economic policies.

At a recent Treasury hearing in the UK Parliament, David Mendes de Costa from Citizens Advice told us: "The people that are coming to us are having to make impossible choices of whether to pay for their car insurance or put food on the table - we've had several clients come to us who are having to make food bank referrals because of the rising cost of insurance."

And, as ever, not all things are equal geographically either. For some inexplicable reason, according to research by Money Expert Martin Lewis, car insurance costs for drivers here in Scotland and London are significantly higher than in other areas of the UK.

The UK government's inaction on this issue is not just disappointing, it's negligent. The Financial Conduct Authority must step up and launch an immediate enquiry into these price disparities.

Here in the Highlands, we rely much more on car travel than in urban areas. For many people in the Highlands and Islands, using a car isn't a choice; it's a necessity, and while improved public transport helps, it isn't a viable option for many folk. The burden of escalating insurance premiums, coupled with higher fuel costs, exacerbates the challenges even further.

I'll continue to push the UK government and the FCA to launch an inquiry into this matter. In the meantime, if you've been affected and are willing to share your story, please contact me via www.drewhendrymp.scot. Your personal experiences always help highlight issues. Hopefully, together, we can demand accountability and fairness.

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