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Car insurance prices U-turn for first time in three years

Drivers are celebrating an unexpected U-turn in car insurance costs as prices drop for the first time in three years.

Car insurance is now £768 on average – £13 cheaper than it was 12 months ago. However, it is still £97 (14%) more expensive than two years ago, and £261 (52%) more than ten years ago. That’s according to what is claimed to be the UK’s most comprehensive car insurance price index based on more than six million quotes from Confused.com.

However, customers who renew with the same insurer are not benefitting from these savings. In fact, drivers who stayed with the same insurer and renewed between January and March this year saw their premiums go up by £45 on average.

Insurers appear to have softened prices as the Government announced a review of the Ogden Rate discount, expected in April 2019, which could mean they pay out less when a claim is made. The Government also announced a reform to the way whiplash claims are calculated and paid, which may have also had an impact.

Despite recent price drops, some drivers are facing more expensive insurance costs than others – particularly men. They are paying £95 more than women, although the gap has closed since the previous quarter when it was £114. Insurers may not assess drivers based on gender, as stipulated by the EU gender directive, but there are other risk factors which cause men to have higher premiums. For example, they tend to drive more expensive cars with larger engines, on average, so they make higher-value claims. Men also tend to have significantly more motoring convictions.

Certain age brackets are bucking the downward price trend. 68 year-olds for example have seen thei9rn premiums rise by £40 (8%) on average since last year. However, they are still only paying £543 – significantly less than the national average. 21 year-olds also saw an increase, with their premiums going up by £38 (2%) to £1,621. But it’s 18 year-olds who are currently paying the most – an eye-watering £2,114 on average.

As ever, male drivers aged between 17 and 20 pay the most of any demographic ̶ £2,348 on average, compared to the £1,699 paid by women in this age group. Female drivers aged between 61 and 65 are paying the least and less than half the national average, with a typical bill of just £363.

“Finally drivers have had some good news, with the end of rising car insurance costs in sight,” Louise O’Shea, the CEO of Confused.com, said. “However, it’s clear that many motorists are not seeing these savings reflected in their renewal letters, so it’s more important than ever to shop around for a better deal.”