CAR INSURANCE COSTS FALL SHARPLY

The average annual car insurance premium has fallen by £55 from the previous quarter, according to the latest Premium Drivers report from comparethemarket. This is the steepest fall in premiums over a three-month period since this research began in 2012. The average premium in Q1 2021 (December 2020 - February 2021) has dropped to just £652. This represents the lowest quarterly average for car insurance premiums since Q3 2015, when a typical premium cost £606. Premiums have also declined by an average of £103 year-on-year, as the pandemic has caused a sharp drop in the cost of insurance. This also represents the largest 12-month decline on record. There is usually a seasonal drop in the cost of car insurance in the first few months of the year, but this trend has been significantly accelerated by the pandemic in Q1 2021. During the past year, the Government's travel restrictions have resulted in fewer cars on the road, which in turn has led to a 19% decline in car insurance claims (according to the Association of British Insurers). Insurers seem to have passed on some of these savings to motorists through lower premiums. The cheapest premium typically available in Q1 2021 has also tumbled by £68 year-on-year. It now stands at £560, falling from £603 in Q4 2020. This drop means there are still significant savings available to drivers who shop around for the best deal when their policy comes to an end. Motorists can save an average of £92 by switching to the cheapest premium available. A drop in the number of inexperienced drivers on the road may also have contributed to the decline in car insurance claims and subsequent fall in premiums. The latest figures from the DVLA show a 48% drop in the number of people passing their practical driving test in 2020, compared with the previous year, as the pandemic prevented or discouraged many people from learning to drive.

Mobile
Narrow
Narrower
Normal
Wide