Average cost of motor insurance tumbles to two-year low
The average cost of motor insurance has fallen to its lowest levels in two years, according to figures from the Association of British Insurers (ABI).
At £466 in the first quarter of this year, the average annual policy was £15 cheaper than during the previous quarter, when it was £481.
The £15 drop was the fastest quarterly fall since 2013 and the average price of cover at £466 is the lowest since the first quarter of 2017.
The tracker looks at the price consumers pay for annual comprehensive cover, rather than prices quoted.
The ABI said reasons for the significant fall in the price people are paying are likely to include some insurers passing on expected cost savings in anticipation of reforms of the Civil Liability Act, which it said will deliver a fairer compensation system for claimants.
Also, new vehicle registrations in March saw an increase in new cars purchased, typically by more mature, lower risk drivers – and insurers are also generally keeping their prices competitive, the ABI said.
Mark Shepherd, ABI’s assistant director, head of general insurance policy, said: “The falling cost of motor insurance is great news for motorists after several years of rising premiums, which largely reflected the UK’s costly personal injury compensation system.
“As the industry promised, motorists are now beginning to see the benefits of the personal injury reforms recently enacted.
“However, some cost pressures remain, with rising repair costs, and the Government needing to resist any temptation to further increase insurance premium tax.
“So motorists should continue to make the most from a competitive market by shopping around for the best deal for their needs.”