Consumers advised on hidden car insurance costs

Consumers have been advised to check for hidden car insurance costs before committing to a policy.

With the cost of such insurance rising, many drivers in the UK are looking for the most competitive premium on the market.

However, recent research from Which? Money indicated that around 80 per cent of insurers charge some form of administration fee on top of the initial cost.

Some 105 of the 151 companies surveyed charge for policy amendments, which include adding a named driver or changing your address with a cost of up to £55.

Furthermore, the study revealed that more than 60 per cent of car insurance firms apply an average cancellation fee of £40, but this can soar to £85 with some insurers.

Prospective customers should also ensure they are aware of interest rates added to insurance premiums, as this can be as much as 37 per cent APR for direct debits payments.

Graeme Trudgill, of the British Insurance Brokers' Association, said it is crucial to find out exactly how much an overall policy costs with interest added.

"Some comparison sites don't display the rate and instead advise the customer to check with the insurer," he said.