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Car insurance costs 'soar'

The cost of insuring a car has risen significantly over the last year, according to a new study, particularly for people who pay by monthly instalments.Research conducted by uSwitch revealed that the amount spent on car insurance and fuel has risen nearly £500 to an average of £2,482 a year.Motorists who pay their premiums monthly rather than in a one-off payment could be paying £624 million more, as average interest on such instalments is 23.8 per cent APR, the report said.Ashton Berkhauer from the price comparison site said that if they can afford it, consumers should avoid paying for insurance monthly."It may seem like a neat solution if you're cash strapped but it carries a hefty interest price tag so should be avoided where possible," he added.According to the survey, more than 13 million motorists pay for their car insurance monthly, at an average extra cost of almost £50.A separate study from Fair Investment found that 57 per cent of drivers prioritise price when it comes to choosing a car insurance policy.

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