Comprehensive motor insurance prices continued their downward trend, falling by a further £17 to £579 in the second quarter of this year, but ongoing drops are unlikely to be sustained, according to Towers Watsons latest pricing index.
Prices for new comprehensive policies, published by Towers Watson together with the confused.com price comparison website, fell by an average of 2.8% between March and June this year.
Young drivers gained the most from premium reductions, with annual comprehensive price cuts for all 17-year-olds amounting to £1,000 or 32%. For the under 21's, premium reductions averaged over 20%, according to the index.
For third party, fire and theft policy holders, quarterly reductions were much smaller at 0.3%, but over the last 12 months prices fell on average by nearly 14%, or just over £150.
In the last 12 months alone, UK drivers saw average savings of nearly 15%, or less than £100 per policy.
But Gemma Stanbury, head of car insurance at confused.com, said: 'While it is great news for consumers that premiums are continuing to fall, these ongoing drops in car insurance prices are unlikely to be sustained.
'We've seen premiums reduce continuously over the last couple of years, so motorists should not necessarily expect prices to continue dropping at this rate.'
Regionally, however, some motorists experienced rising car insurance premiums, particularly those who lived in the City of London. Motorists in this area saw an annual rise price increase of 2% and a quarterly price grow by 11%, bringing the average premium to £1,044. This is £465 more than the national average.
Average prices also rose in Carlisle (2.5%), Edinburgh (1.4%), Lancaster (1.3%) and Kingston-upon-Thames (1%).
However, drivers in Manchester and Merseyside enjoyed the biggest annual decrease, averaging £184.
Stephen Jones, UK head of property and casualty pricing at Towers Watson, said: 'This is a record tenth consecutive quarter in which prices have fallen overall even though some parts of the motoring population may not have shared in the latest reductions.
'What it shows in particular is that the UK motor market is still competing and innovating hard in the younger drive segment.'
However, he pointed out that recent reports by both the Competition and Markets Authority on insurance repair costs and by the Transport Select Committee on whiplash and small claims came too late to have any effect on this latest quarter.
'But it will be interesting to see if the proposals they contained influence insurers' actions over the next quarter,' Jones said.
