The average UK car insurance premium fell by more than £50 over winter, according to research by a leading price comparison site. The study by CompareTheMarket.com found the average premium between December 2020 and February 2021 was considerably lower than the average during the preceding three months.
According to the company’s figures, the average insurance premium dropped to £652 over the winter that spanned 2020 and 2021, down from £707 between September and November 2020. The firm says that is the steepest fall in premiums over a three-month period since it began collecting data in 2012.
CompareTheMarket.com also says that is £103 cheaper than premiums were 12 months earlier, before the coronavirus pandemic put prices into freefall. As a result, it’s the lowest three-month average for car insurance premiums since the summer of 2015, when a typical premium stood at £606.
The comparison site says it would normally expect to see a slight drop in premiums over the first few months of the year, but it says the pandemic has played a huge role in deflating premiums over the winter. Travel restrictions have cut traffic, and the Association of British Insurers’ data shows there has been a 19 percent drop in claims as a result.
However, CompareTheMarket.com says the suspension of driving tests and the resultant drop in the number of inexperienced drivers on the road may also have contributed to the drop in prices. Figures from the Driver and Vehicle Licensing Agency (DVLA) show a 40 percent drop in the number of people passing their practical driving test in 2020.
But it seems those who have passed their test recently will benefit most from the drop in prices. The research showed the average premium for drivers under 25 has fallen to £1,097 over the past winter. That’s down from £1,282 in the same period 12 months earlier.
“Motorists will be thrilled that the cost of car insurance has nosedived in the first quarter of this year,” said Dan Hutson, the head of motor insurance at CompareTheMarket.com. “The drop in insurance claims seems to be trickling through to the cost of premiums. Drivers will appreciate the savings as many will be finding it more difficult to manage their finances during the pandemic.
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“Premiums did initially start to sneak upwards in December 2020 but have since plummeted during the latest lockdown. This fall will be particularly good news for young drivers who typically face the highest premiums. Hopefully, more people will be encouraged to learn to drive as travel curbs are lifted and the fall in premiums makes it more affordable.
“However, drivers will only be able to take advantage of the best savings on offer from lower premiums if they shop around when their policy comes up for renewal. Our research shows drivers could save £92 by switching to the cheapest deal.”