The average cost of a new comprehensive motor insurance policy fell by £51 in 2014 to £594, despite late year price increases, according to price a comparison website.
In the fourth quarter of 2014, new comprehensive premiums increased by an average of 2%, or £12. However, over the year, the cost fell by 7.8% per policy.
Current premium levels, published by confused.com's car insurance pricing index in association with Towers Watson, showed that the upward shift last year failed to prevent new comprehensive motor premiums falling significantly for a third year in a row. These figures follow annual decreases of 12.5% and 12.7% in 2013 and 2012 respectively.
In a similar trend third party, fire and theft (TPFT) prices in 2014 increased by 0.9% in the final quarter having only a small impact on an overall decrease of 8.3% in the year. The average new TPFT premium now stands at £966.
Young people benefited the most from the 2014 price decreases with those under 23 typically seeing double digit percentage reductions. The average comprehensive premium fell by over 21% to £1,983 from £2,512 at the end of 2013, fuelled by the number of telematics products on offer.
On a regional basis, comprehensive insurance customers in four of 23 regions received annual price decreases in excess of 10%.
Drivers in Manchester and Merseyside has the highest average premiums outside inner London at £807, while those in the Scottish Borders enjoyed the lowest average premium at £397.
On a regional basis, drivers in South Central England received the smallest price decrease in the year of 5.3%, due to the average 3.9% fourth quarter increase.
Stephen Jones, UK head of P&C pricing at Towers Watson, said: 'Taking 2014 as a whole, the last three months have shown some realism returning to the market in the face of falling fuel prices leading to increased driving, increasing accident frequency and the lack, as yet, of definitive solutions to the credit hire and whiplash issues. If prices continue to rise, pricing and product innovation will come increasingly to the fore.'
