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18 Jan 2021
Jamie Gibbs Jamie Gibbs

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

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A rush of cars on a busy motorway at sunset

The cost of car insurance is down £52 since last year, to an average of £763. 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 6% over the past 12 months. That's according to our car insurance price index, powered by Willis Towers Watson.

But our research shows that more than two in five (42%) of drivers who recently had their car insurance renewal (October-December 2020) saw their price increase by £49, on average*. 

 

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Impact of lockdown sees people driving less

As the UK spent most of 2020 in various stages of lockdown, there was much less traffic on the road.

And according to our research, Brits expect to drive around 2,000 fewer miles this year compared to 2020. 

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 £81 more than women

Female drivers saw their prices fall slightly less than men. Their car insurance costs 6% (£49) less than last year. They're paying £718, on average.

Male drivers saw a drop of 6% (£55) compared to last year. And men pay more than women for their insurance, at £799, on average. 

This is the first time men have paid less than £800 for their car insurance in two and a half years.

READ MORE: The Confused.com 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 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 £1,220 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: 

  • Central Scotland - £72 (10%) decrease - average premium £643

  • South Wales - £76 (10%) decrease - average premium £659

 

'Shopping around is key'

Louise O’Shea, Confused.com CEO, says:

“We’re seeing some of the biggest car insurance savings for a long while and it couldn’t come at a better time.

"It’s been nearly 12 months since we first went into lockdown and this put so many people in a difficult situation, so I have no doubt this news will be welcomed by so many.

"We’re at home and driving a lot less, it’s only right our car insurance prices should reflect that.

“That said, it’s important to remember that these savings are only being seen by those shopping around.

"We know from our research that insurers are still putting up renewal prices for some drivers.

"Even if the increase is small, please don’t settle for this as there will be an insurer out there willing to offer a better price."

 

Statistics obtained from a nationally representative survey of 2,000 UK motorists, carried out by One Poll on behalf of Confused.com. The survey ran between 6 January 2021 and 8 January 2021.

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