Van premiums race ahead
- Annual van insurance cost hits £954
- Driver under 25 paying up to £3,025 a year
- ‘Carriage of own goods’ cover can save around £100
- Average best buy premiums up 9.7% in year to April
- Insurance Premium Tax rise from 6% to 9.5% a major factor
ADVICE on how to cut van insurance costs as tax drives up premiums 10% to £954 comes from insurance market research experts Consumer Intelligence.
Average best-buy prices have increased 9.7% in the past year, with increases in Insurance Premium Tax a major factor, with drivers aged under-25 now paying up to £3,025 a year.
Insurance Premium Tax rose from 6% to 9.5% on 1 November 2015 and following the March Budget will rise a further 0.5% to 10% on 1 October 2016 to raise £700 million to be spent on flood alleviation works.
However van drivers who opt for “carriage of own goods” cover – appropriate for workers such as builders, plumbers, carpenters and shopkeepers who commute to work – can cut costs to an average £859 a year.
New van sales hit an all-time high last year of 371,830 partly driven by the increase in delivery services and among the 4 million vans now on the road it is the classic “white van man” who is seeing insurance prices rise the most.
Price rises for van insurance however are lower than for car insurance which is increasing at around 13% a year, according to Consumer Intelligence’s analysis – which is used by the Government’s Office of National Statistics to calculate official inflation statistics.
Average market van premiums have accelerated in the past six months with prices rising 6.1%. Price rises for “carriage of own goods” have averaged 8.8% in the past year while average increases for “social, domestic and personal” usage have been 11.2%.
Ian Hughes, chief executive of Consumer Intelligence, said: “The van insurance market is experiencing the same pricing pressure as the car insurance market with the Insurance Premium Tax a major factor.
“Drivers who use their vans for work are escaping the worst of the rises but are still paying higher premiums on average than motorists.
“It makes sense for drivers to ensure they source the appropriate insurance for their van as those who only need carriage of own goods cover can make substantial savings. It also makes sense to shop around as prices will vary month on month and between providers.”
For those who choose “carriage of own goods” their cover will also include social, domestic and personal use. For those who choose social, domestic and personal use they are covered to and from permanent place of work. A lot of people who choose this cover and have a van will probably have a pastime that suits having a van as either their sole vehicle or as a second vehicle.
Detailed analysis shows average premiums for over-50s are up by 9.9% in the year to April to £357 compared with price rises for the under-25s of 1.1% to £3,028. Those aged 25 to 49 have seen prices rise by 11.9% to £603.
Average premiums for social, domestic and personal use are £953 after an 11.2% rise while carriage of own goods cover has increased 8.8%