Car insurance costs fall by 11% over the past year

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Car insurance costs fall by 11% over the past year

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By Lauren Howells.

The average car insurance bill has fallen from £847 to £752 in the last 12 months, according to new figures released by comparison website Confused.com.

Changes to the Ogden discount rate used to calculate compensation payouts, which were announced early last year, had reportedly been at least in part to blame for the increase drivers had seen to their car insurance premiums in 2017. The changes were subsequently revised in autumn last year after a backlash from the insurance industry.

Drivers now enjoying “some respite” from inflated prices 

The comparison website said that drivers were now enjoying “some respite” after suffering from the inflated prices that followed the Ogden rate announcement, which caused insurers to “accelerate” prices. 

However, their new research revealed that those who renewed with the same insurer were not benefiting from these new-found savings, with 62% of drivers who had bought car insurance in April-June 2018 reporting an average premium increase of £49.

Confused.com revealed what it called the “sweet spot”, the best time for drivers to shop around for their car insurance. It said that it had discovered that drivers could save up to £613 on average by looking for their car insurance on day 21 of their 30 day renewal period.

Prices may begin to flatten 

However, confused.com said that despite car insurance premiums being “significantly cheaper” than they Car insurance costs fall by 11% over the past yearwere in 2017, the decrease in the last quarter was “minimal” (-2% or -£16), which may suggest that prices could begin to level out.

It predicted that as it was likely that insurers were “already accounting” for the possible review of the Ogden rate, drivers probably would not see much of a reduction on their premiums over the next year.

In general, car insurance premiums have continued to rise over the past decade, with the average cost of car insurance in the second quarter of 2008 significantly lower than it is today, at just £499.

Men paying £92 more than women

According to confused.com‘s figures, men sill pay £92 on average more than women (a drop from £95 in the previous quarter), despite the EU’s gender directive meaning that insurers are no longer able to assess a driver based on their sex. However, other risk factors, such as the fact that men tend to drive more expensive cars, cause men to have these higher premiums. Men also tend to have more motoring convictions than women. 

17-year-olds saw a £403 price reduction year-on-year 

While drivers of most ages have seen some level of decrease in their insurance costs, 17-year-olds saw a £403 price reduction year-on-year and are now paying less than 18 and 19-year-olds. Confused.com says that this is likely to be due to more telematics insurers specialising in 17 years old entering the market.

Louise O’Shea, CEO at Confused.com, said that although car insurance prices were dropping, they would start to increase once again at some point in the future and encouraged drivers to shop around.

By | 2018-07-17T08:15:32+00:00 July 17th, 2018|Business, Personal Finance|0 Comments

About the Author:

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After completing her law degree, Lauren decided to follow her passion for writing. She regularly contributes articles to CLNews on personal finance and general consumer topics.

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