Owners of older vehicles have benefited more from falling insurance prices than drivers of new cars, according to new research. A study by price comparison site CompareTheMarket.com found insurance premiums for older cars fell by around £90 in 2020, while the average premium for new cars rose by almost £130.
CompareTheMarket.com’s data shows four in 10 cars on British roads (38 percent) are now more than a decade old, and seven in 10 cars (69 percent) are now more than five years old. CompareTheMarket.com says older vehicles are typically more expensive to insure as they are more likely to break down and they do not benefit from the latest safety innovations, but the pandemic appears to have cut the gap.
According to figures, the average premium for a car that is more than 10 years old fell to £1,521 in 2020, down £87 from an average of £1,608 during the previous year. Over the same period, the average premium for new cars increased by £128 to reach £1,212.
The price comparison site says the pandemic has seen drivers hang on to their vehicles, with fewer new cars purchased. Figures from the Society of Motor Manufacturers and Traders (SMMT) appear to back that up, with new car registrations down almost 30 percent in 2020.
CompareTheMarket.com reckons the average car on British roads is four years old, and those cars have seen their average insurance premium fall very slightly. In 2019, the average four-year-old car would have cost £1,102 to insure, but that fell to £1,066 in 2020.
“New car sales have practically ground to a halt during the pandemic as showrooms have been forced to close, people have not been using cars to commute and many drivers have been under more financial strain,” said Dan Hutson, the head of motor insurance at CompareTheMarket.com. “These conditions mean the average age of cars on the road is increasing as most drivers are content to delay buying a new car until the economic situation is more certain.
“The good news for most drivers is that average premiums for older cars are falling year-on-year. To take advantage of these savings, motorists must remember to shop around for the best deal when their policy comes up for renewal. If drivers have automatically renewed their policy for a few years in a row, they may find they are paying substantially more than they need to for their car insurance.
“For anyone planning to channel their inner Steve McQueen by buying an old Mustang or another classic car, it is a good idea to check the cost of the insurance beforehand. Premiums can change significantly by the year of the car’s production or between similar models. Given these vehicles can often have steep maintenance or repair costs, drivers should look to save as much as possible on the cost of their insurance.”