As new rules on pricing zoom into view for insurers, the direction of travel for the cost of car insurance may be about to change after months of COVID-related contractions, according to insurance pricing experts, Consumer Intelligence.
Premiums have edged ever-so-slightly downwards by 0.6% in the last three months – with some UK regions even beginning to see premiums rise for the first time in over a year. The average motor premium in the UK is now £782.
Prior to this quarter and earlier in the pandemic, premiums had plummeted due to stricter COVID restrictions – when fewer cars were on the road, which had brought about a reduction in accidents and claims. Fast forward to today and insurers appear to be jostling for position in response to the new rules to tackle price walking.
Long- term view
Average overall premiums have increased 12.5% since October 2013 when Consumer Intelligence first started collecting data. Although prices are still 20% off their September 2017 pricing peak, with the COVID-19 pandemic subduing car insurance premiums for much of the last 18 months.
Age differences
In the last three months, we’ve seen something of a divergence in prices within our age categories.
Average yearly premiums for the over-50s have now risen 0.6% in the last three months. Whereas motorists aged 25-49 recorded slight declines of 0.5% over the same period, while our youngest cohort – the under-25s – witnessed much steeper falls of 2.5%.
The annual cost of car insurance is now typically £1,717 for the under-25s; this compares to £580 for those aged 25-49 and just £350 for the over-50s.
Regional differences
Premiums are beginning to tick upwards in some UK regions. In the last three months, Scotland (1.8%), the East Midlands (0.6%), the Eastern region (0.6%) and Wales (0.2%) all saw the cost of car insurance rise.
Whereas other regions continue to see prices retreat over the same period. The fastest fallers being the West Midlands (-2.1%), Yorkshire and the Humber (-1.7%) and London (-1.6%).
When looked at over a 12-month period, all UK regions have seen premiums fall – mainly due to the stricter restrictions imposed by the government earlier in the pandemic.
London drivers (£1,261) continue to be the most expensive to insure, with the North West (£1,104) following in second. The South West (£468) remains the cheapest UK region to buy car insurance.
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