This week's Emergency Budget was bad news for motorists: the government's 2.5% VAT rise grabbed the headlines but under the news radar was a 1% increase in the standard Insurance Premium Tax (and 2.5% increase on the higher rate - usually applied on used car warranties).
That doesn't sound like much but Parker's understands that a report due out in July will reveal a rise of around 22% in average insurance premiums. Last year premiums rose by an average of 22.5%. That's a near-on 50% increase in two years.
With a 2p rise in fuel duty planned within the next 12 months the future looks bleak for Britain's car buyers and owners. VAT is still charged on fuel so we could see a 3p total increase in the cost of fuel by January 2011.
SO HOW CAN MOTORISTS CUT COSTS?
The need to cut costs has never been so acute and the quickest and easiest way to reduce costs is to get insurance premiums down.
Shopping around for cheaper insurance is key. Insurance cover renewal letters sent automatically usually tell you that your company considers you to be a 'valued customer' then follows that up with horrendously expensive quote for a year's cover.
Most savvy customers will use a comparator site to get a cheaper quote, but there are still those who renew without shopping around.
Indeed, a 44-year old member of Parker's who lives in London got a renewal quote on a 120bhp MG ZT saloon for over a £1,000. Using a comparator site he found quotes that ranged from £1,250 to £450, eventually settling for the £450 quote for a year's cover with Quinn Direct.
All this suggests that the insurance company is making a killing on those who just accept their renewal quote.
Not so, says, Ian Crowder from the AA. He told Parker's: 'The renewal letters are sent out automatically - insurance companies with millions of customers can't do it manually. The quotes seem high, but they are not. Savvy customers who shop around are eating into insurance companies profits.'
Currently half the motor insurance business is conducted through comparison websites and they offer a quick and easy way for consumers to cut their premiums.
The past two years have proved tough for insurance companies. Profit margins have been slashed as claims, fraud and compensation payouts have risen.
'There has been a massive increase in the number of thefts of upmarket cars,' adds Crowder. 'There's also a new generation of ambulance-chasing lawyers who approach people who have been in accidents in order act on their behalf to get sizeable compensation payments. All these factors have pushed up premiums and they are set to rise even further.'
Earlier this year Irish insurer Quinn Direct went into administration after claims rocketed. The company specialised in cover for young drivers and it paid the price. The Irish government stepped in as it sought to keep the company alive, but Crowder believes more insurance companies will fold as margins get even tighter.
But those tales of woe don't help the consumer who may feel that the initial ludicrous quote just confirms their fears they are being ripped off.
A spokesman for the Association of British Insurers insisted that nobody is making a killing in the industry, but still advised consumers to get a selection of quotes before renewing their insurance policy.
He added: 'The UK's motor insurance market is competitive, and customers can benefit from shopping around to get the right policy at the best possible price.'
So the mantra remains the same: if you want cheap insurance shop around... even it does mean that you'll eventually put your insurance company into administration.