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Car insurance bills drop on use of telematics

Cherry Reynard
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Cherry Reynard

Average car insurance bills have fallen 9.1% over the past 12 months, with under-25s the biggest beneficiaries

The use of telematics starts to have an impact on premiums. Telematics – or black box technology – monitors driving and allows insurance companies to reward people who drive more safely.

Under-25s saw average annual premium quotes of £1,608 after prices fell 15.4% in the past year, according to new analysis from insurance research group Consumer Intelligence (CI) shows. The over-50s only saw prices drop 6.8% in the past year, but their bills are far lower to start with, at £392.

Across the market 22% of all the top five cheapest quotes came from telematics providers. For under-25s around 60% of the most competitive policies are telematics while just 7% of the most competitive for over-50s are telematics.

All parts of the country are benefiting, but the biggest annual price cuts are seen in the North West at 14.9%. Drivers in London still see the highest annual bills at £1,150 – more than double the lowest at £510 in Scotland.

Although premiums have come down this year, they are still 20.4% higher than February 2014 when Consumer Intelligence – whose figures are used to calculate official inflation statistics – first started collecting the data.

John Blevins, Consumer Intelligence pricing expert said: “The trend in quoted premiums is down which may be partly due to insurers passing on the anticipated benefits of whiplash reforms now. It’s another sign of the increased competition for business and it is likely premiums will continue to fall unless there are any major shocks in claims or tax rises.

“The influence of telematics is a major factor with increased use of it by the over-50s and a 3% rise since March according to our data. Generally over-50s experience the biggest price rises as a percentage and the smallest price cuts so older drivers should explore telematics if they want to beat the demographic trend.”

The table below shows the average premiums across the country.