The price of driving is increasing rapidly as insurance premiums are set to rise alongside the tax rises announced in the recent Budget.
Datamonitor has released a reports which shows the UK car insurance market is set to make a profit in 2009 following 14 years with none. Firms have been losing money because of the stiff competition in the market, which has meant prices need to be rock bottom to get any business.
"While insurers have needed to raise their prices, they’ve been unable to do so due to the level of competition between insurers and the fact that the vast majority of consumers buy on price," said Andrew Haslip, financial services analyst for Datamonitor.
85% of customers base their choice of car insurance provider on the price of the policy, so it remains unlikely that prices will rise that noticeably. The internet is allowing customers to compare their quotes based on price alone with the rising popularity of online comparison sites such as Only Insurance.