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Adam Jolley

Car insurance premiums fall by 11%

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Average car insurance prices fell by 11% - equivalent to £95 - over the past 12 months, but many drivers still aren’t benefitting from savings.

White car on money

The price of car insurance has gone down £95 over the past year – a decrease of 11%.

As a result, the average driver now pays £752 per year for their premium.

That’s according to the second Confused.com car insurance price index of 2018.

The price index began in 2006 and is published every three months.

Why have prices decreased?

The fall in car insurance prices is testament to the impact the Ogden rate discount had on insurers.

The UK Government dropped the rate to 0.75% in March 2017, meaning insurers had to pay more for personal injury claims, which drove drivers’ premiums upwards significantly.

However, insurers seem to have recovered from the shock of this change, and have been able to soften their prices.

Despite car insurance premiums being significantly cheaper than last year, the dip on the last quarter is minimal, with prices down £16 (-2%) over the last three months. This suggests that prices might begin to flatten.

Motorists aged 17 have seen prices decrease the most

One set of drivers to benefit most from falling prices are 17-year-olds, who have seen a £403 price reduction year-on-year. 

This is likely due to more telematics insurers specialising in 17-year-old drivers entering the market.

Even so, 17-year-olds are still paying an eye-watering £1,889 a year for car insurance, while 18- and 19-year-olds are paying £2,052 and £1,893 respectively.

As ever, male drivers aged between 17 and 20 are still paying the most of any demographic  ̶  £2,294 on average, compared to the £1,660 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 £356. 

Elderly female motorist

Male drivers pay more than females

The latest index shows men are paying £92 more than women for car insurance, although the gap has closed somewhat since the previous quarter when it was £95.

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.

Over half of drivers fail to shop around

Despite recent price drops, new research reveals customers who renew with the same insurer are not benefitting from these savings.

In fact, a nationally representative survey of UK drivers by Confused.com reveals those who renewed their car insurance with the same insurer between April and June this year (2018) saw their premiums go up by £49 on average.

In total, 58% of drivers stayed with the same insurer rather than seeking out a better deal elsewhere. 

To encourage drivers to take advantage of savings, Louise O’Shea, CEO at Confused.com, is letting drivers in on a little-known secret which could save them up to £613 in some cases.

Confused.com data shows there is a day 21 ‘sweet spot’ for drivers which could see them receive the best price when it comes to renew.

The average car insurance cost for drivers shopping around 21 days prior to renewal is £651. This is compared to drivers who shop around for car insurance on the same day as receiving their renewal notice from their insurer, who pay almost double (£1,264), on average.

Motorists urged to shop around

Louise O’Shea, CEO at Confused.com, says: “Drivers have experienced a rollercoaster when it comes to car insurance pricing. This is caused by insurers reacting to the changes in the Ogden rate, which is used to calculate the cost of some bodily injury claims.

"I’m very happy drivers are going to have a few more pounds in their pockets. However, often motorists don’t see these savings reflected in their renewal notices. Even when prices are coming down, we should all still shop around to get the best deal. 

“Our data suggests drivers should hang on until 21 days prior to their renewal date, when car insurance prices appear to be at their lowest."

Louise adds: "We’re continuously monitoring the market to find the best renewal date for our customers, and will send them a reminder to ensure they’re getting the best deal. And if we still can’t beat the price their current insurer is charging, we’ll give them the difference, plus £20.

"Please take a few minutes to check your renewal letter and get a new price from Confused.com. We could easily save you up to £289.”

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