Car insurance premiums on the rise, says AA

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Car insurance premiums have risen for the first time for nearly three years, with young drivers facing the biggest increases, a survey suggests.

The AA's index of the cheapest deals on the market showed that the cost of annual comprehensive car insurance rose by 5.2% in the three months to the end of June.

Drivers aged 23 to 29 have seen a 6.2% rise over the same period, the biggest increase of any age group.

They typically paid a premium of £683.

"Insurers have been releasing their reserves to maintain their competitive edge to the point where this is no longer sustainable - and we are seeing premiums beginning to rise once more," said Janet Connor, managing director of AA Insurance.

"The days of cheap car insurance premiums are over - price rises are inevitable."

A quote for a typical comprehensive motor insurance policy for all age groups has risen to £549.

The AA estimates that the rise in insurance premium tax, announced by Chancellor George Osborne in the Budget, will add £18 to the cost of the average comprehensive car insurance policy.

The insurer also reported a 1.3% rise in the index of cheapest home and contents insurance premiums, the first increase since 2012.

The average premium for a contents policy has hit £61.18 with the typical buildings premium up to £108.15.

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