If you’re looking to renew your car insurance, now wouldn’t be a bad time to do it, as premium prices are bottoming out, with an average 19.3 per cent drop in the last 12 months alone. This is the largest drop since records began being taken on insurance prices 20 years ago.
The average price for car insurance is just over £504 at the moment, dropping six per cent in the past three month period according to KentOnline. However, there are some concerns that this could be the bottom of the hill and a new one will start to rise as we head towards winter and there are the usual problems with vehicle break downs and harsher weather conditions causing people to lose control on the road.
AA Insurance director Simon Douglas said: “This could be the ‘last hurrah’ for cheaper car premiums. These falls are now becoming unsustainable as insurers are digging into reserves to maintain their competitive edge. Some insurers are starting to resist pressure to cut premiums.”
There’s also concerns that insurance fraud is still too common, despite increased uptake in telematics helping to curb the practice.
“Although the number of injury claim lawyers cold-calling potential claimants has sharply fallen thanks to the (Government) reforms, the number of claims remains stubbornly high,” added Douglas.
Not everyone agrees however. Liberal Democrat and MP for Bradford East, David Ward said in a statement that he believes the falling insurance premium prices are purely due to government crack downs on insurance fraud:
“The biggest ever annual fall in insurance premiums as announcement by the AA is really excellent news and shows that the reforms already implemented by the Government are working in helping to significantly reduce car insurance premiums across the country,” he said.
If you’re in the youngest bracket for insurers, the 17-22 gap, then unfortunately even at the levels they are now, your insurance is still going to be pretty high. The average is almost £1,100, which while still down a lot from this time last year (as much as 25 per cent in some cases), is still often more than their car cost.
Other groups didn’t see quite such reductions, with the elderly seeing the least drop off in premium prices, at just 2.6 per cent.
Much of the reason for all these reductions however, is due to competition in the market. Direct Line announced recently that its own policies had fallen by several per cent, with some of those already taken out, getting reductions mid-premium, which is much rarer than offering discounts to new customers. Despite this though, it still managed to post a profit over 225 million, according to HeraldScotland.
Image source: David Lisbona