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Average car insurance premiums fall by 5.5%

Autocar logo Autocar 09/07/2018 Sam Sheehan

Average car insurance premiums fall by 5.5% © Autocar Average car insurance premiums fall by 5.5% UK motorists are paying on average 5.5% less for their car insurance than they were 12 months ago, putting the brakes on increasing rates that reached new highs last year.

The decline, with the average annual bill now totalling £712, is due to insurers fighting to offer more attractive prices in an increasingly competitive industry.

The price of car insurance reached a new peak in September last year, but data analytics company Consumer Intelligence said new technology, such as telematics (black box) devices that reward safe driving with lower premiums, have helped to drag costs back down.

A Consumer Intelligence spokesman said: “Insurers are now free to compete on price without Insurance Premium Tax increases or changes to the Ogden rate, which sets compensation for major personal injury claims. That is very welcome and should provide some relief for drivers when other motoring costs such as petrol prices are on the rise.

Related: The cheapest cars for new drivers to insure [Motoring Research]

Top 10 cheapest cars to insure for 17-24 year-olds: You’re young, you’ve just passed your driving test, and you’ve got the keys to independence. It’s time to buy a car. Only it’s not that simple, because the shortlist of four-wheeled delights you’ve lined up for your first taste of the open road soon becomes even shorter. The problem: car insurance. Research by the Association of British Insurers (ABI) has revealed that one-tenth of a young driver’s salary is spent on car insurance, and that’s before you’ve factored in the cost of fuel, servicing and the monthly repayments on your new motor. Comparethemarket.com has released details of the top 10 cheapest cars to insure for 17-24 year-olds, based on the average price returned for vehicles with more than 1,000 enquiries for a particular model. Opt for one of these motors and you stand a better chance of not paying over the odds. The cheapest new cars for young drivers to insure

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“The downward trend should continue with the increasing adoption of telematics helping to maintain the momentum. It’s interesting that around 23% of all the most competitive quotes are now from telematics providers.”

Despite the fall, the current rates are still 21.9% higher than in October 2013, when Consumer Intelligence first started collecting the data.

The age group that has benefited the most from the decline is 17 to 25-year-olds, whose annual bills have gone down by 11.9%. 

Londoners pay the highest average annual premium of £1024, but that’s a fall of 5.2% on last year. Motorists of the second costliest region, the north west, pay on average £847, representing a 9.5% reduction year on year. By contrast, Scotland is the cheapest place to insure a car, with premiums averaging £522 per year, although that's a comparably insignificant 0.1% fall on last year’s premiums.

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