Quarterly data released today by the UK’s leading price 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 £458.75, almost £13 less than the previous quarter (April-June 2019) when it stood at £471.70. This is the first time there have been three consecutive quarters of premiums below £500 since summer 2015.
The data, which is based on analysis of 1.7 million fully comprehensive car insurance quotes on MoneySuperMarket, also reveals that the average premium for under 30s has declined over the past year. Those aged 17-19 saw the biggest reduction, with premiums dropping by 4% from £1,032.19 in Q3 2018 to £991.34 in Q3 2019. However, premiums have risen for everyone over 30, with over 65s seeing the biggest increase (£260.81 to £275.66).
East London remains the most expensive place to insure your car at an average of £913.92 for fully comprehensive cover, despite decreasing by £21.28 in the last three months (£935.20 in Q2). The Isle of Man is still the cheapest place to insure your car at £264.79, having previously been £294.48 in the last quarter.
Women saw the average cost of a fully comprehensive policy drop 4% year-on-year, from £430.91 in Q3 2018 to £411.98 in Q3 2019. Men also saw a drop in premiums, paying an average of £503.35 – a 5% decrease compared to Q3 2018 (£530.60).
Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, commented: “In August, the government changed the discount rate applied to compensation pay-outs from minus 0.75% to minus 0.25%. 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 30s.
“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.
“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, we also saw the FCA announce that around six million customers are negatively impacted by insurers’ dual pricing practices because they renew with the same firm rather than shop around – meaning that they are potentially missing out on £1.2bn a year in savings. Regardless of your age or where you live, it pays to shop around at renewal rather than remain with your existing insurer.”