Car insurance premiums down by 8.4% annually, research finds
Telematics policies and a quieter period for claims in 2020 have helped to push the cost of car insurance down, Consumer Intelligence said.
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Your support makes all the difference.Car insurance premiums have plummeted by 8.4% annually, with the average policy costing £779, according to analysis.
Premiums are on a downward trend generally across all age groups, data consultancy Consumer Intelligence said.
It said motorists aged 25 to 49 have seen a 2.1% fall in premiums over the past three months, while over-50s and under-25s have seen decreases of 1.5% and 1.1% respectively.
The average cost of car insurance for the under-25s is now £1,735.
For the 25-to 49-year-old age bracket the average cost is £586, and for over-50s an annual policy typically costs £345.
It’s not just the uptick in telematics quotes behind the plummeting premiums
Looking at reasons for the downward trend, Consumer Intelligence said there has been an increase in telematics quotes. Telematics policies can help drivers access cheaper policies, by rewarding them for good driving habits.
While they are often used by younger drivers, the availability of telematics products for older age groups has also increased, according to the research.
With the coronavirus lockdowns also resulting in fewer cars having been on the roads, insurers benefited from a quiet year of motor claims in 2020 and have been able to pass savings onto customers, the report said.
It added that some brands are also pricing competitively ahead of Financial Conduct Authority (FCA) rule changes which will come into force from January 1 2022.
The new rules will mean renewal quotes for customers are not more expensive than they would be for new customers.
Harriet Devonald, product manager at Consumer Intelligence said: “We are seeing a downward trend for premiums across the board – in all of our age and regional segments – and it’s not just the uptick in telematics quotes behind the plummeting premiums.
“With the FCA’s pricing remedies coming in at the end of the year, some brands are looking to gain volume while they can. Others, who benefited from a quiet year of motor claims in 2020, have been able to pass savings onto customers, whilst other brands are following the market downward in order to remain competitive.”
Prices have now fallen 18.2% from a September 2017 pricing peak and are now around levels last seen in 2016, Consumer Intelligence said.
Drivers in London (£1,456) continue to be the most expensive drivers to insure typically, with the North West of England (£994) following in second place.
At the other end of the scale, the South West (£517) is the cheapest region for car insurance, followed closely by Scotland (£524) and the East Midlands (£532), the report said.
Here are the annual changes in premiums across Britain, with the average of the five cheapest quotes in May 2021, according to Consumer Intelligence:
– East Midlands, minus 6.6%, £532
– Wales, minus 6.6%, £742
– London, minus 7.2%, £1,456
– South East minus 7.6%, £662
– Scotland, minus 7.8%, £524
– Eastern England, minus 8.1%, £615
– Yorkshire and the Humber, minus 9.4%, £767
– North West, minus 9.6%, £994
– West Midlands, minus 10.0%, £738
– South West, minus 10.1%, £517
– North East minus 10.9%, £714