Debt Management Alert: Motor premiums soar

Many UK motorists could find themselves needing debt management support as a result of soaring car insurance premiums.

This week the AA reported that the cost of car cover increased by seven per cent in the final quarter of 2009 – the largest rise since records began. This takes the average quoted premium to just over £1,000.

It seems that those looking for the cheapest deals are suffering heavily. The company's 'shoparound' premium - which tracks the cost of the lowest priced quotes – rose by 11 per cent over the same period.

The additional cost will be an unwelcome extra on top of rising energy bills and squeezed household incomes.

Kevin Still, director at Atlantic, said: "One person's debt spiral can impact other motorists who may already be in financial difficulty, as honest policyholders bear the brunt of rising fraud and uninsured drivers.

"Many people need a car just to support their income," he added, "especially if they live in rural areas. It is another factor fueling the increased need for debt advice."

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