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Car Insurance Price Index reveals dramatic drops in prices

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Car Insurance Price Index reveals dramatic drops in prices -Insurers sweeten the deal for young male drivers

Average cost of comprehensive car insurance – £678,decrease of 14.9% yr-on-yr
Comprehensive car insurance premiums fell 30.7% for males aged 17-20
17-20 yr old females see a yr-on-yr increase of 6.2%
Most expensive comprehensive car insurance premium in Inner London – £1,110
Average price difference between men and women is now only £27

The latest Confused.com/Towers Watson Car Insurance Price Index reveals the average quoted comprehensive premium for 17-20 year old males has fallen by a staggering 30.7% across the UK over the last 12 months. This is the biggest yr-on-yr decrease the index has ever reported in this group, seeing them now pay on average £2,493 for their comprehensive insurance.

After several years of soaring increases, car insurance prices have fallen dramatically. The average comprehensive car insurance price now stands at £678 as of Q2 2013, compared with £797 this time last year, a yr-on-yr decrease of £119 (-14.9%). For Third Party Fire and Theft cover, average premiums for Q2 stood at £1,109, showing reductions of 3.5% yr-on-yr with reductions of 5.2% quarter on quarter.

In the last 12 months, 17-20 year old males have seen their comprehensive car insurance premiums fall significantly by £1,103, falling from an average of £3,596 to £2,493. In stark contrast, females aged 17-20 are the only age group to see a yr-on-yr increase in comprehensive car insurance premiums, seeing an increase of 6.2%, paying an average of £1,995. This compares with £1,878 this time last year, representing a rise of £117.

Young female motorists have traditionally enjoyed much lower car insurance premiums than their male counterparts, due to the fact they were statistically less likely to make a claim. However under the EU Gender Directive, which took effect on December 21st 2012, insurers are no longer able to use gender as a factor when pricing insurance.

Despite being subject to hikes in car insurance premiums at the start of this year, women still enjoy lower prices overall than men, though the gap between genders does appear to be decreasing.

In fact, this price gap has reduced dramatically over the years; currently 17-20 year old males are paying £498 on average more than women for their comprehensive car insurance in Q2, 2013. This compares with the biggest difference seen in Q1 2011 where men aged 17-20 paid £1,787 more on average for their car insurance than women (£3,798 compared to £2,011).

Despite prices plummeting, 17-20 year old drivers in the UK are still being quoted average comprehensive car insurance premiums of £2,173, paying more than three times the average insurance premium (£678).

Men vs. Women – removing age from the equation

In Q2 2013, men have enjoyed an 18.4% decrease compared with this time last year, paying on average £690 for insurance. Women experienced a less impactful drop in premiums, with a decrease of 10% over the same period. As a result of these price changes, the difference between men and women’s car insurance premiums on average now stands at just £27.

This is a huge contrast to price differences seen this time last year, when men were paying £110 more than their female counterparts on average for their car insurance (£846 compared to £736).

How the picture looks regionally

The Confused.com/ Towers Watson Price Index also reveals that all regional areas are seeing a significant decrease. The biggest yr-on-yr decreases in insurance premiums in Q2, 2013 can be seen in Scotland, the North West and the North East. Even areas within the big cities such as London, Manchester & Merseyside are seeing decreases of more than 15%.

Regionally, the most expensive comprehensive car insurance premiums are in Inner London, where the average cost stands at £1,110. This is closely followed by premium prices in Manchester/ Merseyside, Outer London and the West Midlands where motorists can expect to pay in excess of £850 on average.

In contrast, North East & East Scotland enjoys the lowest comprehensive car insurance premiums paying on average £457.

At the opposite end of the spectrum men aged 17-20 in Manchester/ Merseyside areas have enjoyed significant price decreases of 32.7% on average. However, while insurance premiums continue to fall for this age group they are still left facing huge costs of up to £3,656 in Inner London for their insurance premium.

In the Scottish Highlands region male drivers aged 17-20 are quoted a more modest £1,878. But they are still paying £1,200 more than the average cost of comprehensive car insurance (£678).

Gemma Stanbury, Head of Car Insurance at Confused.com says:

“It will be welcome news that the second quarter of 2013 has brought car insurance premium reductions across the board. In fact we have seen a 15% decrease in comprehensive insurance premium, meaning cheaper prices all round for British drivers.

“There has always been a clear distinction between the cost of car insurance for men vs. women. But following the EU gender ruling the gap is almost diminished with a price difference of only £27, compared to a difference of £132 just a year ago.

“Unlike previous years younger drivers are no longer being singled out with price rises and are also enjoying dramatic price drops. In Q4 2010, 17-20 year old male drivers saw year on year comprehensive price hikes of 40.6%, in contrast to Q2, 2013 which sees them drop by a staggering 30.7%.

“We would recommend to all drivers to take advantage of these latest price drops if they are able to renew and not accept their renewal price, as the insurance market is highly competitive and can change fast. As the research shows, within three months, the average comprehensive car insurance premium has fallen by a significant £58.

“At Confused.com, we have more than 130 insurance providers competing for customers. So for all those drivers that have been impacted by these price movements and find themselves eligible for cheaper premiums, it would be worth shopping around for a new policy which could save them a considerable amount of money.”