The cost of car insurance in the UK is at the lowest point in six years new data reveals.
That is according to the latest car insurance price index from Confused.com, powered by Willis Towers Watson. Based on more than six million quotes per quarter, it’s the most comprehensive car insurance price index for new policies in the UK.
Drivers can now expect to pay £514 for their car insurance, on average, as prices fall by £97 (16%) in 12 months – the steepest drop in prices since Q1 2014.
This is the fourth consecutive quarter where the cost of car insurance is significantly cheaper than the previous year, which could be attributed to the change in driving habits throughout the COVID-19 pandemic.
During this time, Confused.com research found that UK drivers reported a significant drop in how frequently they were driving, and police reported a 26% decline in the number of accidents attended to. These are just two of many key considerations for insurers when they offer a customer a price for their car insurance.
As risk fell, insurers were able to reduce their prices to reflect the fact that fewer claims were likely to be made, meaning drivers were able to make significant savings when shopping around for their car insurance.
While the average price saved across the UK is close to £100, some drivers are seeing greater savings than others. In fact, this past quarter, male drivers have been able to save more money than women when shopping around.
The average cost of insurance for male drivers is now £549 – a £103 (16%) drop compared to last year. Meanwhile, female drivers are now paying £456, following an £88 (16%) fall in prices, on average.
Drivers in Manchester and Merseyside have seen their price of car insurance fall by £159 (20%) in 12 months, and are now paying out £646 for their policies, on average, making it the most expensive area for insurance outside of London.
Louise O’Shea, CEO at Confused.com said: “From January there will be some important changes to the way insurers are pricing customers, and the concern is that customers will accept a flat or slightly lower price and simply choose to renew. However, the saving we’re seeing today goes to prove how competitive insurers are being. And this is reflected in the fact that customers have saved almost £100, on average, by choosing not to settle for their renewal price and shopping around instead.
“It’s also likely that prices could start to creep up as people return to work and people are spending more time travelling on the road, which all means the risk of accidents is a lot higher. We’re already starting to see this in some areas of the UK. And this will mean that the overall price of insurance will increase, and your renewal could too. It’s important to remember that the FCA ruling doesn’t stop insurers from increasing your price altogether.”
