Car Insurance Premiums Hit Five Year Low

Fri 29th Jan 2021

The cost of insuring your car in the last 12 months has got cheaper, with many major insurers passing some of their massive savings onto their customers.

With fewer cars on the roads in 2020, the motor insurance industry made huge profits, and while it might not be that they passed on some of those saving immediately, it appears that the bonuses may be showing up in premiums which are on average one per cent cheaper than in 2019.

The Association of British Insurers has said that the average premium is now at £465, its lowest level since 2016. The most recent quarterly figures show that October to December saw drivers paying three per cent less for their premiums, even if that was higher than the previous quarter due to seasonal trends.

“Despite a year like no other, it is good to see that during 2020 motorists continued to get the best deals in a competitive motor insurance market,” said Laura Hughes from the Association of British Insurers.

“In addition, the extra support that insurers continue to give to motorists during this uncertain and unsettling time is helping drivers adapt to this new normal.”

Despite the cost of insuring your car falling, some motor insurance experts are advising those ready for renewal to shop around as the best deals can very often be found at another insurer, sometimes more than £100 difference.

“With fewer cars on the road last year due to lockdowns, working from home and social distancing, premiums have fallen to their lowest level in years. This is welcome news for most households as budgets continue to be stretched,” said  Dan Hutson from Compare the Market.

“However, these savings are usually only available to drivers who shop around for the best deal at the end of their policy, with our research showing the difference between the average premium and the cheapest premium to be £104.”