In 2020, the price of car insurance has declined. However, premiums are still higher in comparison to figures from just 12 months ago.
Research shared with Utility Saving Expert identified that the average car insurance price for fully comprehensive policies between January and March 2020 were £5 higher, from £480 to £485 compared to just one year ago. Since April, they are now declining, with the average cost at its lowest level seen in five years at £462. The study was based on tens of thousands of customer quotes over a six-year period.
Throughout 2019, the average insurance cost fluctuated. In the first quarter it was £480, increasing to £487 in the second quarter, then decreasing to £474 in the third quarter. The average price was just over £500 towards the end of the calendar year.
In the first quarter of 2020, prices dropped to £485, although fully comprehensive policies were still higher year on year. In April 2020, the average cost dropped to £462, this was a five-year low for the industry.
Research shows that premium inflation was triggered as a response to the alteration in the discount rate. The latest figures quantify that April’s prices are at their lowest level in five years. It’s still yet to be determined if the coronavirus pandemic is the main driving force behind this, although it is certainly a factor. During the lockdown, there have been far fewer vehicles on the roads, resulting in less accidents. It’s fair to say that we have seen reduced prices on a temporary basis for this reason. This is all likely to change later on though as millions of motorists will likely see their premiums increase post-lockdown.
As an aside, here are the top ten most expensive locations for car insurance with their respective averages:
- East London (£986)
- Ilford & Barking (£900)
- North-west London (£887)
- Southall and Uxbridge (£858)
- North London (£825)
- Harrow (£762)
- Bradford (£760)
- South-east London (£752)
- Manchester (£746)
- West End London (£740)
To obtain cheaper cover, drivers should consider increasing their voluntary excess and think about the insurance group their car falls into.
When purchasing cover, younger drivers will still be expected to pay the highest amount. Over 50s pay three times less on average compared to motorists under the age of 25. Purchasing a comprehensive policy for a 17 to 19-year-old costs £971 on average, while drivers aged 20 to 24 pay the most of any age group, with an average fully comprehensive policy costing them £975. On the other end of the scale, drivers aged 65 or overpay just £289 on average.