Drivers are celebrating an unexpected U-turn in car insurance costs as prices drop for the first time in three years.
Car insurance prices has gone down £13 over the past year – a decrease of 2%.
As a result, the average driver now pays £768 per year for their premium.
That’s according to the first Confused.com car insurance price index of 2018.
The price index began in 2006 and is published every three months.
Why have prices deceased?
Insurers seem to have softened prices as the government announces a review of the Ogden Rate discount, expected in April 2019, which could mean insurers pay out less when drivers make a claim.
The government has also announced a reform to the way whiplash claims are calculated and paid which may have also had an impact.
The significance of these announcements can be seen within the last three months especially, as Confused.com’s index reveals prices dropped by £59 (-7%) over the last quarter.
Motorists aged 68 have since prices go up
Despite prices falling on average, some drivers have seen the cost of their car insurance go up, depending on their age.
For example, motorists aged 68 have seen their premiums rise by £40 (+8%) since last year. However, they are only paying £543 - significantly less than the national average.
Meanwhile, 21 year olds also saw a sharp increase, with their premiums going up £38 (+2%) to £1,621.
Of any age, 17 year old drivers are celebrating the biggest price reductions and are paying £118 (-6%) less than they were last year.
Yet, the average car insurance policy for a 17 year old driver is still a hefty £2,003, making it crucial for them to shop around when it comes to renewal.
As ever, male drivers aged between 17 and 20 are still paying the most of any demographic - £2,348 on average, compared to the £1,699 paid by their female counterparts.
While female drivers aged between 61 and 65 are paying the least and less than half the national average, with a bill of just £363.
Male drivers pay more than females
Despite recent price drops, men are paying £95 more than women, although the gap has closed somewhat since the previous quarter when it was £114.
Insurers are unable to assess a driver based on their sex, as outlined by the EU gender directive, but there are other risk factors which cause men to have higher premiums.
For example, men tend to drive more expensive cars with larger engines, on average, so they make higher-value claims. They also tend to have significantly more motoring convictions than women.
Across the country
Motorists in Scotland will be driven to shopping around for better deals as their premiums buck the downward trend and they face another swathe of annual price increases.
Motorists in the Scottish Borders have seen an increase of £32 (+6%) since last year, and are now paying £579.
Outside of Scotland, motorists living in Central and North Wales saw the second biggest price rise, with premiums up by £12 (+2%) to £629.
However drivers living in Inner London are celebrating the biggest price reduction, making savings of £81 (-6%) since last year and £104 (-8%) less than the previosu quarter.
While drivers living within Inner London are enjoying these cost decreases, they are the only motorists who can expect to pay over £1,000 for car insurance, on average.
Find out how prices have changed where you live using our calculator.
Motorists urged to shop around
Louise O’Shea, CEO at Confused.com, says: “Finally drivers have had some good news with the end of rising car insurance costs in sight.
"However, it’s clear that many motorists are not seeing these savings reflected in their renewal letters, so it’s more important than ever to shop around if they want to get a better deal.
“Being loyal doesn’t always pay, so to get the message across to cost-burdened drivers the team and I are guaranteeing to beat the price insurers are charging at point of renewal. If we can’t beat it, we’ll give you the difference, plus £20.
"Please take a few minutes to check your letter and get a new price from Confused.com. We could easily save you almost £300.”