Cost of car insurance falls to a four-year low
The cost of insuring a car has fallen to a four-year low as motorists benefit from a record 19% drop in average premiums compared with a year ago.
The Confused.com car insurance price index, in association with Towers Watson, reveals the average cost of comprehensive car insurance in the first quarter stood at £596 – a drop of £140 against this time last year.
The figure, including a reduction of 7.5% on the previous quarter, means that average premiums have dipped below £600 for the first time since late 2009.
Confused said the price drops were across the board, with both male and female motorists in all age groups benefiting from reduced premiums.
However, it warned that the pattern of continuous price reductions over the last couple of years was unlikely to be sustained.
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The benefits of falling prices have been very notable for younger drivers as the average premium for a 17-year-old fell by nearly 39% in the last year, equating to a cost saving of nearly £1,400 to £2,203 for first-time motorists. A typical 50-year-old also enjoyed a year-on-year price reduction of 20% to £511.
Despite enjoying the greatest price decrease, the Manchester and Merseyside area still ranks as one of the most expensive for comprehensive car insurance premiums (£832), outranked only by Inner London, where the average price comes in at £985.
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Shares in car insurers fell on the London stock market as insurance analyst Eamonn Flanagan of Shore Capital Stockbrokers said the report made for 'grim reading' for the likes of Admiral, Esure and Direct Line.
He said competition remained fierce in the industry, although there might be other reasons for the decline, such as the increased use of telematics technology.
Insurers are also benefiting from better claims trends, having surged in previous years due to sharp hikes in personal injury claims, fraud, uninsured drivers and regulatory changes.