Car insurance premiums in reverse gear
Analysis of over 16 million car insurance quotes over the past year through MoneySupermarket has shown car insurance prices have fallen by 10.6 per cent, with average premiums now standing at £478.
The MoneySupermarket Monitor on Car Insurance tracked the average car insurance prices of customers who shopped for their insurance using the UK's number one comparison site. During 2010, motorists in the UK were hit with a period of sharp inflation. Car insurance prices rose rapidly through the year and into 2011. The Monitor found that the cost of car insurance reached a peak of £554 on average in April 2011. Since then average car insurance premium prices have mostly been decreasing and now stand at an 18 month low of £478 a year.
Kevin Pratt, insurance spokesperson at MoneySupermarket, said: "There is no doubt the cost of motoring has been a hot topic, and issues such as the price of fuel hitting new highs has put additional pressure on already squeezed household budgets. Car insurance inflation was a major issue in 2010 and 2011, which led to a number of government inquiries to try and address the problem. Our analysis shows we are now seeing deflation; great news for motorists - for now.
"The main factor influencing the cost of car insurance is competition in the market between insurers. A few key insurance providers are looking to take on new business and are willing to offer low premiums to attract customers. While this competition continues, drivers will benefit but there is no guarantee how long it will last."
Postcodes and car insurance premiums
The MoneySupermarket Monitor revealed motorists in Cleveland saw an average 14.0 per cent reduction to the cost of their car insurance premiums between 2011 and 2012 - the biggest decrease across the country. Motorists in Harrogate and Shrewsbury have also experienced similar decreases of 13.6 per cent each. London saw the smallest decreases to the cost of car insurance premiums, with West London only seeing a three per cent decrease in comparison to the national average of 10.6 per cent.
Although every part of the UK has benefitted from the downward trend in car insurance prices, the average cost of cover varies considerably across the nation. Drivers in Greater London suffer the highest car insurance premiums in the UK, with average prices of £748. North West England has the second highest prices, averaging £592, followed by the West Midlands which stand at £516 on average. The difference in price between these three areas is vast when compared to those in South Scotland who have the cheapest UK car insurance premiums of £309 on average - 59.0 per cent less than the price paid by drivers in Greater London.
Kevin Pratt continued: "It's great to see all areas of the UK are seeing cheaper car insurance premiums this year. However, with premiums fluctuating so much between regions, the benefits will differ greatly across the nation. Typically, those in Scotland have lower premiums. Scottish postcodes take many of the top spots for the cheapest car insurance, yet when it comes to the winners of car insurance deflation only one Scottish postal town features. Those living in certain parts of Greater London seem to be getting hit from both sides - featuring heavily in both the table for the UK's highest car insurance premiums as well as those areas seeing the smallest decreases.
"Although our analysis shows that prices appear to still be falling for motorists, there are no guarantees that this downward trend will continue. I urge those who receive their car insurance renewal soon to act quickly to benefit from the lower car insurance prices being offered. Shopping around for cover around 30-40 days before your premium expires may make a real difference to the price you're quoted. Compare prices in order to get the best saving on a policy that suits your needs. Currently, the typical saving made by those using MoneySupermarket to take out their car insurance is £411."