CAR insurance premiums are pushing sharply upwards for the first time in three years - and further price hikes are "inevitable" - a report has warned.

The days of cheap motor insurance deals are over, the AA's British Insurance Premium Index said, adding that changes unveiled in the recent Budget are expected to add an extra £18 to the cost of a typical comprehensive car insurance policy.

The report chimes with other industry research warned that drivers in Scotland - especially those in the east and north-east of Scotland - were being stung by the sharpest price hikes.

The AA found that the average quote on offer for a driver who shops around for comprehensive cover is now £549.46, up more than 5 per cent on this first quarter of 2015.

In 2014, the average cost of cover had hovered around the £520 mark.

It is the first time since winter 2011 that premiums have recorded a significant quarterly increase.

Young drivers are bearing the brunt of the increases, with people aged between 23 and 29 years old seeing a 6.2% jump in their average premiums, to reach £682.62.

In Scotland, the average cost of cover has jumped by 4.4% over the past three months according to the AA index, although Scottish drivers continue to receive the lowest quotes on average - typically just under £392.

The AA findings correlate with the results of research earlier this month by Confused.com which found that motorists in the east and north-east of Scotland had seen their average premiums soar 9.2 per cent in the second quarter of 2015, the highest increase of any UK region. On the flipside, this takes a typical quote for a driver in the region to £430 - still well below the UK average of £600.

Meanwhile, drivers in Central Scotland are paying £476, up 5.9 per cent on the previous quarter, while drivers in the Highlands and Islands are paying £429, up 4 per cent, according to Confused.com.

Steve Sanders, finance director, for the price comparison website, said: “Motorists in Scotland have been hit hard by the latest annual price rises, particularly drivers in the East and North East where premiums have risen by 9.2%. And market movements in the last 12 months suggest consumers should prepare themselves for price rises to continue for the rest of 2015.”

Premiums have been on a downward trend in recent years, in part due to a crackdown on bogus claims for injuries such as whiplash.

Insurers have been battling to maintain their competitive edge to the point where this is no longer sustainable, said the AA report, with motorists also facing hikes in insurance premium tax from November following changes announced in the July Budget.

Janet Connor, managing director of AA Insurance, said: "The days of cheap car insurance premiums are over - price rises are inevitable.

"This stealth tax grab will add around £18 to the cost of a typical car insurance policy and it has come at a time when insurers have no capacity to absorb the cost and will have to pass it on."