Fall in price of fuel outdone by rise in insurance costs

Fall in price of fuel outdone by rise in insurance costs

The average yearly cost of keeping a family car on the road is €10,594, down just €18 euro on last year's figure.

Research from the AA shows, however, that Irish motorists have not benefited from dramatic falls in the price of fuel over the past year.

Fuel prices are down compared to 2014, but those gains are wiped out by an average 20% rise in insurance premiums for the typical motorist.

The AA says the trend looks set to continue into 2016, with insurers nervous about rising claims and about improving their reserves.

“This is the biggest one-year rise in Insurance prices in well over a decade,” said Conor Faughnan, Director of Consumer Affairs at the AA.

“It marks a big change in the market with insurers nervous about rising claims and about improving their reserves. All prices are rising but if you have had no claims or points in the year and have done nothing wrong it feels unfair. Unfortunately the trend is set to continue for the rest of the year and into 2016.”

The average price of petrol in July was 145.3 cent per litre, 7% less than the previous year, worth about €145 a year in savings for the average car.

"It's not all bad, and in fact, on that 10-year window, where a British insurance policy used to be 50% cheaper than ours, that's now completely the other way around," said Faughnan.

"As we have made some real progress and as I say, it's less in euros today than it was 10 years ago to insure your car, but, year-on-year, it looks like a huge price increase and there's an element of necessary correction to it, and is going to get worse before it gets better."

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