Car insurance costs are accelerating with average best buy deals rising 4.6% between August 2014 and August 2015, new Research1 from insurance market research experts Consumer Intelligence shows.
However under-25s are avoiding the price rises with average premiums for younger drivers dropping 5.5% in the year to August with the over-50s paying the price as their average costs increase 8.6%.
Younger drivers are benefiting from the growth in black box technology — so-called telematics with nearly half of the most competitive quotes for under-25s coming from telematics providers.
The Consumer Intelligence Motor Insurance Index, based on data developed by the research company which is used by the Office of National Statistics to calculate official inflation statistics, shows average premiums are rising strongly and price cuts for younger drivers have gone into reverse.
Its figures for the year to May showed the average cheapest premiums were 0.3% higher while under-25s were seeing premium reductions of 10.3%
By contrast older motorists are suffering more — average price rises for the over-50s were 5.2% in May and are now 8.6% while for those aged 25 to 49 average premiums are 7.4% higher than last August.
The index shows younger drivers have been long-term winners — Consumer Intelligence data reveals that between October 2013 and August 2015, cheapest car insurance premiums fell by 20.6% for motorists aged under 25, rose by 13% for the over-50s and by 6.7% for those aged 25 to 49.
Younger drivers still pay higher average premiums — the average cheapest premium for all motorists in August 2015 was £696, but for motorists aged under 25 it was £1,680 while drivers aged 25-49 premiums were £481 and for those aged 50-plus they were £258.
Ian Hughes, Chief Executive of Consumer Intelligence said: “Younger drivers are seeing the benefits of the innovation in the market such as Black Box policies and that is reversing the massive increases seen at the turn of the decade.
“Older drivers are to an extent helping to fund the premium reductions for younger motorists and need to ensure they are receiving the best value for money from their insurer.”
The index shows 46% of the most competitive quotes for under-25s now come from telematics providers compared with 32.5% in October 2013.
Notes to Editors
1The cheapest premiums were calculated by comparing the prices offered for 3,600 people by all the major Price Comparison Sites and key direct insurers. The top 5 prices for each person were then averaged to produce the index.
About Consumer Intelligence
Consumer Intelligence conducts consumer surveys and benchmarks price and service performance providing unique insights into competitor pricing and customer experiences, their attitudes, opinions and behaviours. For more information, visit the web site www.consumerintelligence.com