Car insurance premiums drop by 13 per cent in 12 months, new data reveals

Car insurance premiums drop by 13 per cent in 12 months, new data reveals
Car insurance premiums drop by 13 per cent in 12 months, new data reveals

Car insurance can be costly, but premiums in the UK have experienced a welcome drop of 13 per cent over the past year, according to new data.

MoneySuperMarket has revealed that the average costs of a fully comprehensive policy has fallen by £70 in the past 12 months, dropping from £553 to £483.

But despite tumbling prices in the short term, analysis shows average premiums have risen significantly (17 per cent) over the course of the last five years, climbing from £411 to £483.

Regional variations

The data collected by the price comparison website is based on analysis of millions of car insurance quotes created on their site over the last 12 months.

The recent drop in premiums has been attributed to a number of factors, including changing government policies and a crackdown on fraudulent whiplash claims.

Motorists in Chelmsford have seen their premiums fall the most during the past year, dropping from £516 to £423 – a reduction of £93.

Those in Peterborough and Reading have also enjoyed large price drops since September last year, with premiums tumbling by 17 per cent and 16 per cent respectively.

East London remains the most expensive place in the UK for car insurance, while the Isle of Man is the cheapest (Photo: Shutterstock)

Meanwhile, motorists in Dundee have been impacted most by fluctuating prices, with the average cost for a fully comprehensive policy rising by as much as 35 per cent, from £268 in 2013, to £363 currently.

Inverness, Falkirk and Exeter have also seen significant increases in costs, rising by 35 per cent and 34 per cent respectively.

However, East London remains the most expensive place to insure your car, with the price of a fully comprehensive policy now standing at £930.

The Isle of Man was revealed as the cheapest in the UK at a cost of £285.

Gender and age differences

Location isn’t the only factor influencing price differences.

While costs have fallen across almost all regions and age groups over the course of the past year, it is younger divers who are the biggest beneficiaries.

Motorists aged between 17 and 19 have seen their premiums fall by as much as 28 per cent in the past year, from £1,392 to £1,003.

Other age groups have also enjoyed substantial drops, with costs falling by 9 per cent for those in their 30s,  and 7 per cent for those in their 40s.

Similarly, average policy costs have also been tumbling for women this past year, falling by 17 per cent from £515 to £429.

Younger divers have seen the biggest fall in prices, with a 28% fall in cost (Photo: Shutterstock)
Younger divers have seen the biggest fall in prices, with a 28 per cent drop in cost (Photo: Shutterstock)

Men, meanwhile, haven’t seen such a huge difference, although price costs have seen a 9 per cent fall, dropping from £585 to £483.

Despite insurers not legally being allowed to take gender into account when calculating an individual’s premium, there is still an obvious difference in price.

Why the falling costs?

Falling insurance prices have been credited to the Government’s U-turn on the Ogden discount rate (also known as the personal injury discount rate), which has slowly lowered costs for drivers.

Tom Flack, editor-in-chief at MoneySuperMarket, explained: “In 2017, insurers hiked prices significantly to provide larger pay-outs to victims of accidents after the way that personal injury compensation payments were calculated.

“However, after a government U-turn, these rises have been steadily put into reverse.

“It’s a much better picture for drivers than this time last year, but that doesn’t mean you should rest on your laurels and stick with your current insurer when their premium comes up for renewal.

“Most insurers usually save their best prices for new customers, so those who switch could make annual savings of up to £276 – that’s at least the next four tanks worth of petrol.”

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