Car insurance costs on the rise again - with further hikes 'inevitable'

Car insurance premiums are rising sharply for the first time in three years - with insurers warning that further hikes in the cost of cover are "inevitable".

The AA today warned that the days of cheap car insurance were over, as it revealed that the average quote for comprehensive cover is now £549.45 - a 5.2% increase over the last three months alone.

Things are worst for young drivers, with people aged between 23 and 29 years old seeing a 6.2% increase to £682.62 a year and 17-22 year-olds now paying £1,241.81 a year on average.

Things have recently been made worse by the government, the association's British Insurance Premium Index also claimed, with this month's Budget expected to add £18 to the average premium.

Ian Crowder from the AA told ITV News Consumer Editor Chris Choi he thinks more than 10% will have been added to premiums by the end of the year, with more rises in 2016.

Insurers say the price hikes cannot be helped because they are actually making a loss - with the cost of claims outstripping premiums and injury payouts rising 10% a year.

An insurance tax rise - introduced in the Budget and due to come into effect in September - will also mean companies have to rethink their charging policies, industry figures say.