Drivers given £63 alert as insurers cut the cost of quotes

The average cost of car insurance has fallen for the first time in three years so offering some relief to hard pressed drivers.

The typical quote is down by £63 in a year bringing the annual average premium down to a still punishing £861.

The fall has triggered a warning to drivers not to accept the automatic renewal deals being offered by insurance giants, which tend to charge more and take advantage of the loyalty of long-standing customers.

Research by experts at Confused.com found these automatic renewal deals tend to be around £84 higher for as many as six in 10 customers, which means drivers can make substantial savings by shopping around and switching.

And the price comparison site’s data suggests that adding a spouse or shopping ahead of time could save drivers hundreds of pounds on premiums.

Confused.com said prices have finally started fall after a particularly difficult period for drivers when, at one point, premiums were rising by as much as 58 percent a year.

It said: “While data suggests that drivers shopping around are likely to see a cheaper price now compared to last year, there are still ways to save money.

“In fact, additional data found that those shopping around ahead of time are able to save a significant amount on their premium. For example, those who take out a policy 18 days before their renewal date paid 48 percent less than those who bought the day their renewal was due.

“Another way drivers could save money is to add a named driver to their policy if they’re likely to use their car from time to time.

“According to our latest price index data, those who have a named driver on their policy are paying £125 (13 percent) less than those on a single-person policy. And the savings are even greater for those who have their spouse on their policy, of around £363 (38 percent), on average.”

The company said adding security measures such as a steering lock or a tracking device, or opting to park off road or in a secure location can cut premiums. Similarly, even something simple like reviewing and reducing annual mileage could help cut insurance costs.

Confused.com said premiums vary widely depending on the driver and where they live. For example, motorists in London are paying significantly higher than the national average.

In Inner London, premiums are now £1,357, despite falling by £146 (10 percent) in the past 12 months. This is the steepest annual decrease seen in all regions of the UK.

This is followed by Manchester and Merseyside, where prices fell by £102 (9 percent) to £1,052, on average. Drivers in South Central England have also seen a significant drop in their premiums of £73 (8 percent). The average price of insurance in the region is now £815.

Younger drivers are also typically paying a lot more than the UK average. In fact, those aged between 17 and 20 are paying more than £2,000, on average. In particular, 18-year-olds are paying £2,886, while 20-year-olds are paying £2,200, on average.

While most drivers are seeing savings, 17-year-olds are the only age group to be paying more now compared to 12 months ago. Prices for these young drivers increased by £114 (4 percent) over the past year, meaning they’re now paying £2,727, on average.

Rhydian Jones, motoring expert at Confused.com car insurance, said: “After a long period of seeing their car insurance increase, the news of prices starting to come down will be a relief to drivers. It’s the respite we’ve all been waiting for.

“However, prices are still a lot higher than they have been historically. Many of us will still be paying more than we have in the past, despite gaining more driving experience or building up our no-claims bonus. This is why it’s so important to keep shopping around and to make changes to our driving habits if we can. We could also change how we use our cars to see if we could bring our price down even further.

“If you are likely to share your car and are able to add a named driver, ideally who has more driving experience, this could offer some savings on your price. Similarly, shopping around with plenty of time is known to offer significant savings. Or if this isn’t doable, moving your car to a more secure location overnight or adding more security could help save you some money.

“But the important thing to remember is not to accept your current insurer’s renewal quote without looking elsewhere first. That’s why price comparison sites are a great way to check whether you’re getting the best deal. And with a much broader market now than we’ve seen in the past, it’s highly likely that there will be a better policy out there for you, at a better price. We’re so sure on this that we offer to beat your renewal. And if we can’t, you’ll get the difference, plus £20(3).

“There’s no guarantee that prices will continue to fall, especially as insurers continue to face the challenge of rising claims cost due to inflation. So taking steps to make sure you’re getting the best price is still as important as ever.”