Insurance prices remain static
Comprehensive car insurance premiums have held steady during the first quarter of 2015, according to the latest Confused.com Car Insurance Price Index in association with Towers Watson.
This means that the average quoted premium for an annual comprehensive car insurance policy now stands at £591 in Q1 2015. This is a marginal quarterly decrease of just 0.5% (£3), and an annual decrease of £5 (0.8%).
This decrease in price, albeit minimal, is welcome news for motorists, who have been experiencing steadily increasing insurance premiums over the last two quarters, with prices rising in five of the last seven months.
This slight drop in premiums in Q1 2015, coupled with falling petrol prices over recent months, means that motorists have had the opportunity to enjoy some financial respite at the beginning of the year.
And no one will be more relieved than younger drivers across the UK, with 17 year olds now enjoying the cheapest insurance premiums since the Index began (2006). The average annual comprehensive car insurance policy for this age group now stands at £1,901 – down £83 quarter on quarter, and £302 annually.
It’s a similar story for 18 year olds, who also experienced a £207 reductions year on year (£83 over the quarter), taking their average premium down to £1,881. There’s further good news for all ‘younger drivers’, as the Index reveals that premiums for all motorists aged 30 and under are falling year on year.
However, it would seem that hitting the big 3-0 is signalling a shift in gear when it comes to insurance prices. Drivers aged between 30-42 have all seen their premiums increase year on year, with 37 year olds in particular hardest hit, with a yearly increase of four per cent (£18).
Both men and women have seen their premiums fall, albeit marginally, compared to last quarter, with decreases of £1 and £5 respectively. For both sexes, prices are down annually, with the average man’s premium now standing at £615 (-0.9% year on year), and women’s at £560 (-0.7% year on year).
Despite premiums falling by 2.8% annually (-£27), Inner London remains the most expensive region in the UK for premiums, with motorists here now paying £957 for their insurance.
Steve Sanders, finance director at Confused.com said, ‘It’s good news for motorists that car insurance prices didn’t increase at the start of the year. This, coupled with the lower petrol prices that we’ve been seeing, means that drivers across the UK have been provided with some welcome relief.
‘However, the Index results that we’ve seen over previous quarters indicate an underlying gradual increase in premiums, with monthly figures showing prices rising in 5 of the last 7 months. Based on the market movements we’ve been seeing over previous quarters, we’d expect to see these gradual increases return in the coming quarters, growing in size and frequency as the year develops.
‘To see prices remain largely static in the first quarter of 2015, with just a marginal quarterly decrease of 0.5%, is not entirely surprising. Traditionally, insurers increase their prices in December before seeing a reduction in January – this is to be expected. In fact, in five out of the last six years, the Q1 quarterly change has been less than that in the immediately preceding Q4.
‘So, while consumers will be pleased not to have seen any rises this quarter, they should prepare themselves for the possibility of a return to the gradual increases we have been experiencing in previous months, as seasonal pricing patterns balance out.’
