OLDHAM is the most expensive place to insure a car outside London.

This is according to the latest car insurance price index by Confused.com.

Drivers in the town have suffered, as prices soar by £73 (7 per cent) to £1,164.

However, the research shows savvy drivers can combat these rises by shopping around.

New figures reveal drivers in Manchester in Merseyside are now paying £1,005 for their car insurance, on average, following a £41 (4 per cent) increase in 12 months.

These increases are mirrored across the UK, with figures revealing the average price of car insurance is now at £783, following a £23 (3 per cent) increase over the past year.

The data is released following an interim report by the Financial Conduct Authority (FCA), which exposes "dual pricing" practices which inflate premiums for loyal customers who renew year-after-year, many of whom are vulnerable.

But if insurers are forced to balance out the way they price customers, this could see prices for new customers increase even further. This is why Confused.com is urging drivers to shop around to find the cheapest price.

Evidence of this behaviour was found in further research, which reveals 43 per cent of UK drivers who received their renewal in the past quarter (July – September), were being charged £53 more, on average. Although, worryingly, 38 per cent went on to renew with the same insurer, despite the price increase. Most (94 per cent) made the decision not to switch on the basis that the price increase wasn’t significant.

The research also showed that people stay loyal with the hope that they will be rewarded. However, this is clearly not the case. According to the research, drivers stay with their insurer for three years, on average. In fact, nearly one in 10 (7 per cent) admit they stay with their insurer for more than 10 years. But it also highlighted that switching can save, with those shopping with a price comparison website saving £61, on average.

But the FCA has raised concerns that consumers who choose to automatically renew with their current provider are paying higher prices for their insurance than they would if they shopped around. And insurers are targeting these customers who are less likely to shop around with higher prices.

As a result, the FCA highlighted the need to shop around, stating “many consumers who switch or negotiate their premium can get a good deal”. And this applies even if the increase is only minimal.

Amanda Stretton, motoring editor at Confused.com, echoes the FCAs findings and urges drivers to shop around as it’s highly likely there could be another insurer who wants your business.

The FCA is expected to release the full report in early 2020 and is exploring measures to shed more light on insurance pricing. But in the meantime, Confused.com is urging motorists to take things into their own hands and shop around to seek out a better price.

To further incentivise drivers, the company is giving them the chance to save even more by guaranteeing to beat their car and home insurance renewal, or give them the difference, plus £20.

Amanda Stretton, motoring editor at Confused.com comments: “For drivers, buying car insurance is a must. And it’s really disheartening to know that prices in Manchester and Merseyside are more expensive than this time last year. And given recent investigations into car insurance pricing, the situation could only get worse if new measures mean insurers ramp up the price for new customers.

“The FCA has found that loyal customers are being over-priced at renewal. But this really shouldn’t be the case. Customers should be rewarded for their loyalty.

“Until the FCA puts measures into place to protect consumers, we need to be doing all we can to make sure we’re not paying more than we should for car insurance.

“Always shop around, even if your renewal price is cheaper or the same. It’s likely there will be another insurer who wants your business.

“At Confused.com, we’re so certain drivers will be able to find a better price than their current insurer, that we’re guaranteeing to beat their renewal quote, or give them the difference, plus £20. Our price promise has already saved customers thousands of pounds(2).

“Please don’t pay more than you have to - take a few minutes to check your renewal letter and get a cheaper price.”