From This is Money:
The eye-watering interest rates are being charged on insurance premiums that are rising at their fastest for nearly a decade. The average annual comprehensive policy costs £778, according to the AA, up 11% over the past year. But interest charges could add up to £175 to this bringing the cost to £953.
The AA estimates 13.2m of Britain’s 33m drivers pay premiums monthly by direct debit.
The impact will be greatest on young drivers who already face the heftiest premiums and, with smaller incomes, are most likely to pay monthly.
Research for Money Mail by comparison website Gocompare.com shows many major insurers charge an APR of around 25%. The Green Insurance Company charges a hefty 39.4% – more than 38 times the 0.5% Bank of England base rate. Asda charges 28.6%, while Budget and Virgin Money 25.9% and the AA, Churchill and Privilege charge more than 24%. All are way above the average credit card rate of 16.9%.
Gocompare.com spokesman Hayley Parsons says: ‘Wi…