Average car insurance premium under £500 for third quarter running
The average fully comprehensive car insurance premium now stands at £458.75, which is £24 (5 per cent) lower than this time last year. This is the first time there have been three consecutive quarters of premiums below £500 since summer 2015.
The data, which is based on analysis of 1.7 million fully comprehensive car insurance quotes on MoneySupermarket, also found that the average premium for under 30s has declined over the past year.
Those aged 17 to 19 saw the biggest reduction, with premiums dropping by 4 per cent from £1,032.19 in Q3 2018 to £991.34 in Q3 2019. However, premiums have risen for everyone over 30, with over 65s seeing the biggest increase (£260.81 to £275.66).
Looking at the data from a geographical viewpoint, MoneySupermarket found that premiums for motorists in the Shetland Islands fell by 15 per cent (£48.79) during the third quarter of 2019, from £332.53 to £284.74. Those in Kirkwall, the Isle of Lewis and Isle of Man all saw their premiums decrease by 10 per cent.
East London remains the most expensive place to insure your car at an average of £913.92 for fully comprehensive cover, despite decreasing by £21.28 in the past three months (£935.20 in Q2).
The Isle of Man is still the cheapest place to insure your car at £264.79, having previously been £294.48 in the last quarter.
Women saw the average cost of a fully comprehensive policy drop 4 per cent year-on-year, from £430.91 in Q3 2018 to £411.98 in Q3 2019. Men also saw a drop in premiums, paying an average of £503.35, a 5 per cent decrease compared to Q3 2018 (£530.60).
Rachel Wait, consumer affairs spokesperson at MoneySupermarket, said: “In August, the government changed the discount rate applied to compensation pay-outs from minus 0.75 per cent to minus 0.25 per cent. These disappointed insurers, who had been hoping the rate would move into positive territory. The net effect is that they will now be increasing the amount of money they allocate to fund future claims and this may explain why the cost of premiums has increased for the over 30s.
“One reason why average premiums have continued to drop could be that environmental concerns are prompting people to make fewer car journeys. Fewer miles travelled mean fewer accidents, which allows insurers to reduce premiums.
“We’re also seeing fewer new cars on the road, so there are fewer high-value vehicles needing expensive insurance, which is feeding through to the average premiums being quoted.”