Car Insurance UK Price Index

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Car insurance prices continue to fall in 2019

Motorists who don’t shop around when their car insurance comes up for renewal could be missing out on huge savings. To make a saving of up to £222*, drivers should compare what’s on offer by running a new quote.

Insurance companies offer their best prices to new customers as they try to add more business to their books. And they subsidise this by charging their existing customers higher prices at renewal. That’s why it’s best to shop around and make sure you’re getting a competitive deal.

What’s more, our analysis of quotes run on our site shows that premiums are falling for those shopping around – making looking for a new deal even more important. In the first three months of 2019, the average comprehensive car insurance price we saw was £468. That's 7% or £36 less than the figure for the same time period in 2018 (£503).

So why are prices falling? A major reason is that, in 2017, premiums rocketed because of changes to the way personal injury compensation payments are calculated - insurers increased prices to help fund larger pay-outs to victims of accidents. But thanks to a government u-turn, the change will not have the expected impact on compensation awards, which means overall claims costs – and therefore premiums – will be lower.

Additionally, the government is overhauling the legal system to reduce the number of fraudulent whiplash claims, which add £35-£40 to every car insurance premium. So it’s more good news for hard-pressed motorists.

Other factors that can affect the cost of car insurance include the rising cost of car repairs due to a weak Pound to Euro exchange rate. Repair costs are also gradually increasing due to more advanced technology, which makes cars more expensive to fix.

*51% of consumers could save up to £222.52. Consumer Intelligence, February 2019

Average premiums by region

One of the main factors affecting how much you pay for car insurance is population density. The more cars there are on the road, the greater the likelihood of collisions and claims, and more claims means higher premiums. That is why drivers in largely rural areas, such as south-west England and the highlands of Scotland, pay less than those in major conurbations.

Another factor affecting price differentials across locations is fraud. Cities such as Birmingham, Manchester and Bradford have high incidences of staged accidents between criminals and deliberate crashes with innocent victims. These are used to generate unjustified claims for personal injury such as whiplash, so when insurers are asked for a quotation by someone living in a postcode where there is a history of fraud, they charge a higher premium to reflect the local risk profile.

Tap a region to find out more:

How age & gender affect car insurance costs

Age can impact insurance premiums too. In simple terms, the younger (and thus less experienced) the driver, the higher the premium.

Accident statistics show that drivers under the age of 25, and particularly teenagers, are involved in a disproportionately high number of accidents. What’s more, these accidents take place at high speed, resulting in serious injuries to a greater number of people because younger drivers tend to carry more passengers than older drivers.

This could be one of the reasons why ‘black box’ telematics insurance, which allows a driver to demonstrate their safe driving capabilities, is growing in popularity.

It is harder to account for the lower premiums charged to women drivers because insurers are not allowed by law to take gender into account when setting premiums.

The likely explanation is that women tend to drive less expensive cars with lower performance capabilities, both of which help to lower premiums. Also, if women are making fewer claims, they may be moving ahead of men in terms of earning larger no claims discounts.

It’s important to reiterate, however, that pricing discrepancies between men and women are not the result of insurers explicitly charging one gender more than the other, which became illegal in 2012.

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Source information (MSM car insurance quotes, last 6 years, updated on a quarterly basis)

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