The average cost of car insurance in the UK has experienced the biggest year-on-year fall since 2015, figures from insurance comparison site, Confused.com have revealed.
Here’s how much you can expect to pay for your car insurance in the coming year, as well as some tips for lowering your premiums.
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Car insurance costs: What’s happening?
According to the latest Car Insurance Price Index from Confused.com in association with insurance broker Willis Towers Watson, the cost of car insurance in the UK has fallen 14% since the first quarter of 2020.
This translates to an average drop of £87, with costs for men falling by £91 and those for women by £82.
The Confused.com index, which is based on more than six million quotes, shows that UK motorists can now expect to pay an average of £538 for their comprehensive car insurance cover for the next year.
However, not all motorists are benefiting from the drop in car insurance prices.
Those who received a renewal from their current insurer in the past three months actually saw their car insurance costs rise by £45 on average. This, according to Confused.com, shows that you’re likely to pay more if you opt to stay with your current insurer.
However, despite the higher cost, the stats show that nearly half (48%) of these drivers have chosen to stay with their current insurer.
What’s behind the drop in car insurance costs?
The price drop is attributed to fewer drivers on the road as a result of the pandemic. Fewer drivers on the road means fewer accidents and, as a result, fewer claims.
The drop also comes in the wake of a 43% decrease in average mileage in the UK (from 7,239 miles to 4,113 miles) during the pandemic as driving habits changed dramatically.
How can I lower my car insurance costs?
If you’re looking to save on your car insurance premiums, here are a few useful tips that could help you.
Switch to a new car insurance provider
While it might be tempting to stick with your current provider, shopping around and comparing deals could shave a significant amount of money off of your car insurance bill. Car insurance comparison websites are a good place to start.
Arrange your switch early
If you are planning on switching, it’s useful to start your search early. Research suggests that insurance policies could be significantly cheaper if drivers switch several weeks before their renewal date instead of waiting for the day their policy ends.
Spreading the cost of car insurance premiums monthly might be the more convenient option for many. However, you will end up paying more because interest will be added. If you are able to, consider making an annual lump sum payment for your insurance.
With telematics or black box insurance, your premiums are calculated based on the way that you drive. If it’s proven that you’re a safe driver, then your insurer could reward you with lower premiums. The stats show that black box insurance could save you as much as £850 on your car insurance, depending on your age.
Add a named driver to your policy
Adding a more experienced driver to your policy could help lower your car insurance costs. This is especially true if you are a young or experienced driver. It lowers the overall risk in the eyes of insurers because someone with more experience has access to the vehicle as well.
Pay a higher voluntary excess
Increasing your excess could lower your premiums. But, before you go down this road, make sure you can actually afford the excess you choose.
Change your car
It can be fun to drive around in the latest sports car, but it’s not so much fun when it comes to insuring it. You’ll probably have to pay much higher premiums for it. If you want to save on your car insurance costs, consider switching to a model that’s cheaper to insure.
Cars in the UK are grouped into different insurance groups (1-50) based on factors such as car value, performance and the cost of parts. You can find the group for your car on the MoneySuperMarket website.
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