Car insurance premiums plummet 8.1% in 12 months

• Since the turn of the year, prices have fallen 4.1%
• The average motor premium is now £732.

With less cars on the road and a fall in motor insurance claims[1] as a result of the Covid-19 pandemic, car insurance premiums are now 8.1% less than they were 12 months ago, according to analysis conducted by acclaimed insurance data insights business Consumer Intelligence. The average motor premium now stands at £732.

Harriet Devonald, Product Manager at Consumer Intelligence, says: “Prices are down across the board – in all of our age and regional segments. At a market level, premiums have fallen most sharply since the turn of the year.”

Drivers under the age of 25 (-5.5%) saw the biggest drops to their premiums in the last three months, with those aged 25-49 (-4.5%) and the over-50s (-3.6%) following closely behind. When looked at over a 12-month period, all three of our age cohorts saw their premiums fall around 8%. The cost of car insurance for the under-25s is now £1,750; for the 25-49 age bracket it’s £612, with those over 50 typically paying just £356 for an annual policy.

Telematics policies continue to play their part in keeping insurance costs down, especially for younger drivers – with 58% of the five cheapest quotes for drivers under the age of 25 coming from telematics firms.

These telematics providers are also moving up the age scale, targeting older drivers in recent months. Around 17% of the cheapest quotes provided to those aged 25-49 now come from telematics brands, which is up 3% from a year ago. Similarly, 8% of the cheapest car insurance quotes for the over-50s now come via telematics – a rise of 5% in the last 12 months.

All UK regions witnessed premium falls in the last year with drivers in the North East (-12.2%), South West (-10.6%) and the West Midlands (-10.3%) all recording double-digit drops to their car insurance premiums. In the last three months, prices are now falling fastest in London (-5.8%), Scotland (-5.0%) and the Eastern Region (-5.0%). Although London drivers (£1,392) continue to be the most expensive to insure, with the North West (£1,220) not too far behind. At the other end of the scale, motorists in Scotland typically fork out just £440 for an annual policy.

[1] The Association of British Insurers show that the number of insurance claims settled in 2020 reversed 19%.

The 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 compared to the previous month’s top 5, then these variations averaged to produce the index.

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