Car insurance premiums fall to lowest level in four years

Car insurance premiums fall to lowest level in four years

Car insurance premiums are the lowest they have been in four years because of a dramatic fall in claims as a result of the lockdown. 

The average car insurance quote cost £679 in April, according to data compiled by online comparison site comparethemarket.com. This is the lowest since March 2016 and is down £43.20 from last April.

April’s figures are £33.12 cheaper than last month and since February 2020, when the effects of the virus began to take hold in Britain, the average insurance premium has fallen £56.

Drivers that bought cover earlier this year, or have renewals later in the year may be able to switch their policy now while premiums are lower, although this will likely come at an additional cost. This may still be worth doing, given the large savings on offer, but will dependent on the extent of exit penalties.

Dan Hutson of comparethemarket.com said: “For those who have not made a claim and may want to capitalise on these potential further savings, it is possible to switch provider again but it is important you check the terms and conditions before you do.”

Drivers still in their “cooling-off” period, which is a minimum of 14 days, should be able to switch by paying a small administration fee for the number of days they have been covered.

“Every policy is different, so it is worth contacting your insurer first to get the details of the charges you may incur by cancelling and switching before your policy ends,” he said.

The biggest drop was in the cost of insurance for young drivers, which fell from £1,219 last April to £1,098 this month, a reduction of 10pc.

This is despite a rise in speeding offences, according to insurer Co-op, which said its telematics boxes had registered a spike in drivers going over the speed limit during lockdown.

There was, however, a slight increase for people aged between 35 and 44, with premiums up 5pc on last year to £622, although it not certain as to why this was.

Drivers in Northern Ireland saw their premiums fall the furthest, down 9pc on last year, while Welsh drivers pay 8pc less than a year ago.  Those in the South West have the cheapest insurance in the country, paying £518 on average, while Londoners pay more than double this on average.

The latest reductions in car insurance costs are good news for drivers who earlier this week also saw the price of petrol at the pumps slashed to less than £1 per litre.