According to a new survey by AA insurance, carried out as a part of the AA British Insurance Premium Index, younger motorists pay more for their car finance and their car insurance .

Car insurance premiums are apparently climbing every quarter, with young people expected to pay more for their car insurance. Third party fire and theft climbed by 4.62 per cent, with average annual comprehensive car insurance premiums also climbing by 1.24 per cent.

The practice of raising premiums is common, and Norwich Union were the first insurer to act last month. Other insurers are expected to raise their premiums in the near future.

Kevin Sinclair, the managing director of AA Insurance, said: It has long been clear that the increasing cost of meeting both accident damage and personal injury claims would eventually have to be absorbed by increased premiums. The increase is long overdue. Premiums have been kept artificially low by the entry of new insurers seeking market share and the growth of Internet sales.

Norwich Union made car insurance news last week when they introduced their first ever pay-as-you-drive car insurance scheme.