UK car insurance prices have fallen for the third consecutive quarter, with drivers now paying £50 less on average than they were at the start of 2020.
That is according to Confused.com's latest Car Insurance Price Index, which shows that the average cost for comprehensive car insurance now stands at £765, following a £5 fall over the last quarter.
The figures – which are based on price data compiled from almost six million customer quotes per quarter – also show that prices have fallen by 2% over the last year.
And they could be set to fall further after the Financial Conduct Authority (FCA) announced last month that it is looking to ban insurers from increasing premiums for existing policyholders, known as 'price walking'.
Louise O’Shea, CEO at Confused.com, said: “It’s been a turbulent few months for the world of car insurance and it’s likely to remain that way for some time as insurers try to adapt to dramatic and constant changes in driver behaviour, not to mention how they navigate the much-needed changes announced by the FCA last month.
“The FCA is making proposals which is expected to make switching even easier by streamlining the auto-renewal cancellation process, so we may see people taking advantage of this as they become increasingly sensitive to price.”
The index, which was co-produced by Willis Towers Watson (WTW), shows that motorists in the Scottish Borders benefitted from the greatest quarterly drop in prices, with their premiums decreasing by 5% on average to £554.
Inner London was the only region in the UK to buck the downward trend in prices over the last quarter, with the cost of comprehensive car insurance increasing by 3%.
Drivers aged 17 benefitted from the greatest price fall, compared to other age groups, seeing a 7% quarterly price decrease, bringing their annual premiums down to £1,911.
Meanwhile, policyholders aged 33 experienced the largest price rise of 2%, increasing their annual premiums to £705.
“One of the biggest challenges for insurers and intermediaries alike will be managing the transition to new world pricing given current market competitive pressures, and therefore deciding how and at what point price changes should be made,” said Graham Wright, UK lead of P&C Personal Lines Pricing at WTW.
“It certainly remains one of the most demanding times for insurance pricing.”
Image credit: iStock
Author: Chris Seekings