Car Insurance Costs Bring Relief To Motorists

Wed 5th Jan 2022

While the cost of filling up your car with fuel may be at an all-time high, the actual cost of insuring your vehicle is at a seven-year low, but motorists are being warned that the low costs could soon end.

The average price of motor insurance now sits at £640 after an £80 drop in the three months to November last year, that’s the cheapest price for that period since 2014. However, Compare The Market, who have compiled the data, have said that new regulations to stop loyal customers being penalised, could actually mean higher prices for everyone overall.

That new legislation, which will prohibit insurance firms from offering cheaper deals to new customers, came into force at the turn of the year and there is an expectation that insurers will actually increase premiums for both new and old customers.

“It looks like insurers have been keeping premiums lower as part of a clever pricing game to try and lock in as many customers as possible before new regulations are introduced in January,” said Ursula Gibbs, from Compare The Market.

“While the rule changes should end the loyalty penalty, this does not mean that auto-renewing your insurance will get you the best deal.

“People should be careful not to fall into any traps as insurers may decide to hike premiums for a large number of customers if they can't charge existing customers more. 

“However, the size of any price increases for motor insurance may be limited if more Omicron travel curbs come into force.”