Car Insurance Prices Get Discounted to Almost A Fifth

Car key on an insurance policy. Toned warm.

The average annual cost of automobile insurance is right down to £596 compared to £736 this period last year – a fall of 19.1%.

This is based on the latest quarterly Confused.com car insurance price index.

The index analysed greater than 4 million quotes from between March and January this season to reflect what prices drivers have been investing in cover.

Cheaper car insurance for all those drivers

This fall in car insurance prices is welcome news for motorists, particularly as average premiums have not fallen below £600 a year since 2009.

What’s more, the index shows that the cost of cover has fallen for drivers of all ages, of both sexes, and across all regions of the country.

Automobile insurance prices falling by age

Drivers of all ages are reaping the rewards of cheaper car cover but young drivers have seen the biggest fall in prices.

For example, the standard annual expense of cover for any 49-year-old motorist has fallen by 20.7% over the last one year – down from £644 to £510.

But 17-year-old motorists have seen prices fall by a whopping 38.6% within the same period – from £3,587 to £2,203.

Based on experts, the increase in drivers taking out telematics or black-box car insurance policies is one explanation for falling prices.

With these policies, a tiny black box about how big a packet of playing cards is fitted to the car to keep track of driving behaviour such as acceleration and braking.

This information is then fed to your insurer.

Telematics policies lower vehicle insurance prices

By demonstrating responsible driving, customers can prove to insurers they present a low risk, as well as their premium – the cost of cover – is adjusted accordingly.

Telematics policies are particularly geared towards young drivers who most often have higher vehicle insurance prices due to their higher risk of accidents.

Stephen Jones of insurance analysts Towers Watson says: The frequency with which telematics providers are coming up with the cheapest quote, particularly for young drivers, is rising.

Automobile insurance price by sex

The fall in prices can be partly caused by the European Union (EU) Gender Directive.

This legislation forced insurers to stop using gender to put car insurance prices from December 2012.

Because ladies have fewer road accidents than male drivers, women paid less for car insurance since they were unlikely to make a claim, in the past.

But following this EU gender ban the space between men and women premiums has narrowed.

Male motorists have seen a 17% drop in the cost of cover, down from £748 to £621 before year.

Meanwhile, female motorists have experienced a 22% price drop, with automobile insurance costs down from £721 to £565.

EU gender ban

But, as Gemma Stanbury, head of vehicle insurance at Confused.com, explains, says some gender differences still exist.

Although insurers can’t set prices differently based on gender, there are many factors taken into account when calculating car insurance costs.

For instance, men typically drive better cars meaning their insurance would be more costly than women’s.

Car insurance prices by region

Drivers in Manchester and Merseyside have experienced the greatest fall in car insurance prices of the regions of the nation, with average annual premiums falling by 23% to £832.

However, it really is still probably the most expensive UK areas for cover – outranked only by inner London, where average annual car insurance costs motorists £985.

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