Car insurance cost falls for most motorists across UK

Photo: Darwin Vegher/Unsplash

Car insurance costs are down again across the UK, with premiums under £500 for the third quarter in a row in 2019.

Data from comparison website MoneySuperMarket highlights a continued competitive insurance market for drivers, with the average fully comprehensive policy staying below £500 for the third quarter running and cheaper than the same period in 2018.

Between July and September this year, the average cost of a fully comprehensive premium was £459 – almost £13 less than the previous quarter, when it stood at £472. This is the first time there have been three consecutive quarters of premiums below £500 since summer 2015.

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The data, which is based on analysis of 1.7 million car insurance quotes, also reveals the average premium for under-30s has declined over the past year. Those aged 17 to 19 saw the biggest reduction, with premiums dropping by 4% from £1,032 in the third quarter of 2018, to £991 in 2019.

However, premiums have risen for everyone over 30, with those over 65 seeing the biggest increase – from £261 to £276.

Motorists in the Shetland Islands saw their premiums fall by 15%, or £49, during the third quarter of 2019, from £333 to £285. Those in Kirkwall, the Isle of Lewis and Isle of Man all saw their premiums decrease by 10%.

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East London remains the most expensive place to insure your car at an average of £914 for fully comprehensive cover, despite decreasing by £21 in the last three months.

The Isle of Man is still the cheapest place to insure your car at £265, having previously been £294 in the last quarter.

Women saw the average cost of a fully comprehensive policy drop 4% year-on-year – from £431 in the third quarter of 2018 to £412 in 2019.

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Men also saw a drop in premiums, paying an average of £503 – a 5% decrease compared to the same time next year, when the figure was £531.

In August, the government changed the discount rate applied to compensation pay-outs from minus 0.75% to minus 0.25%.

Rachel Wait at MoneySuperMarket explained: “This disappointed insurers, who had been hoping the rate would move into positive territory. The net effect is that they will now be increasing the amount of money they allocate to fund future claims, and this may explain why the cost of premiums has increased for the over-thirties.”

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“One reason why average premiums have continued to drop could be that environmental concerns are prompting people to make fewer car journeys. Fewer miles travelled means fewer accidents, which allows insurers to reduce premiums. Fewer miles travelled means fewer accidents, which allows insurers to reduce premiums,” Wait said.

She added: We’re also seeing fewer new cars on the road, so there are fewer high-value vehicles needing expensive insurance, which is feeding through to the average premiums being quoted.”

Last week, the Financial Conduct Authority (FCA) announced that about six million customers are negatively impacted by insurers’ dual pricing practices because they renew with the same firm rather than shop around – meaning they are potentially missing out on £1.2bn a year in savings.

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“Regardless of your age or where you live, it pays to shop around at renewal rather than remain with your existing insurer,” Wait said. “Taking control today means that you could cut up to £250 off your premium.”