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28 Apr 2021
Jamie Gibbs Jamie Gibbs

Car insurance sees biggest drop in over six years as drivers spend less time on the road


A rush of cars on a busy motorway at sunset

The cost of car insurance is down £87 since last year, to an average of £538. But it's still important to shop around, especially if you’ve been with the same provider for a while.

The cost of car insurance went down by 14% over the past 12 months - the biggest drop in over six years. That's according to our car insurance price index, powered by Willis Towers Watson.

But our research shows that almost half (45%) of drivers who recently had their car insurance renewal (January-March 2020) saw their price increase by £45, on average*. 


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Impact of lockdown sees people driving less

As the UK spent most of the past 12 months in various stages of lockdown, there was much less traffic on the road.

And according to our research, the average mileage plummeted by 43% to just over 4,000 miles.

Mileage is one of the many factors that make up your car insurance price. So driving less in 2021 could have an impact on the price you pay.

READ MORE: Top tips for cheaper car insurance


Insurance ‘loyalty penalty’ to be scrapped 

The Financial Conduct Authority (FCA) has proposed measures that will stop insurance companies hiking up prices for loyal customers.

This is due to come into force at the end of 2021, but shopping around is still the best way to get a cheaper deal. 


Men pay £97 more than women

Female drivers saw their prices fall slightly less than men. Their car insurance costs were 15% (£82) less than last year. They're paying £477, on average.

Male drivers saw a drop of 14% (£91) compared to last year. And men pay more than women for their insurance, at £574, on average. 

READ MORE: The car insurance price index in full


Men 'riskier' to insurers

The EU Gender Directive means insurers can't work out insurance prices based on whether a driver is male or female. But there are other risk factors that mean men could have higher premiums. 

For example, men tend to drive more expensive cars, with bigger engines and/or newer technology. 

This usually makes for higher-value claims in the event of an accident. 

Men also tend to have more motoring convictions than women. 


Car insurance costs drop across the UK

Though most regions saw a drop in their car insurance prices, some areas are still paying more than the UK average. 

Drivers in Inner London paid £846 for their car insurance on average – the most expensive anywhere in the UK. 

But it's not all doom and gloom when you look at specific areas. Drivers in these areas saw some of the healthy price drops compared to last year: 

  • Manchester and Merseyside - £122 (15%) decrease - average premium £708

  • Scottish Borders - £62 (15%) decrease - average premium £352


Other motoring costs on the rise

The news that car insurance prices are lower will be welcomed by drivers. But other motoring costs are starting to creep up as the UK eases out of lockdown.

According to our fuel price index, fuel prices have been on the up since end of last year. Petrol costs £1.42 per litre, and diesel costs £1.27, on average. This is an increase of 11p and 9p per litre respectively.

You can check petrol prices in your local area and see if you can get cheaper fuel elsewhere.


'Loyalty doesn't pay'

Louise O’Shea, CEO, says:

"It's been just over a year since we went into lockdown for the first time and this triggered a lot of changes in how we’re using our cars.

“What we're seeing is the biggest drop in prices in over six years. But it’s important to remember that these lower prices are only benefiting those who shop around.

"It’s clear from our research that automatically renewing could in fact cost you more money. Loyalty clearly doesn’t pay!

"But if the increase is small, or you're fortunate to see your renewal price drop, please don’t settle for this. There'll be an insurer out there willing to offer a better price."


Statistics obtained from a nationally representative survey of 2,000 UK drivers, carried out by One Poll on behalf of The survey ran between 7-9 April 2021.


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