Premium Drivers index

Each quarter, Compare the Market publishes research on the latest savings for car insurance premiums by comparing our ‘cheapest’ and ‘average’ motor premiums across all age groups to determine something we call the ‘savings variable’. The results help to give you an idea of how much it would pay to shop around for your car insurance, instead of simply auto-renewing with your current provider. In general, the higher the savings variable is, the more you could save by comparing prices.

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Our latest report suggests that insurance premiums have fallen by an average of £100 as whiplash reform send car insurance premiums plummeting.

The drop in premiums over the last two months is good news for UK drivers. While premiums have historically fluctuated throughout the year, the reduction in premiums is more pronounced this year, indicating a more structural fall in premiums.

Car Insurance Savings variable

Today, the average quarterly premium – blended across all age groups – has fallen to £736, a decrease of £8 compared to £744 in the previous quarter. The reduction in car registrations could also have caused providers to compete in a shrinking market.

However, the Savings Variable in December – April 2019 has in fact expanded over the past three months to 15.84%, up from 15.55%. The large difference between the average and cheapest premium two years ago suggested that drivers were failing to shop around, resulting in a reduction in competition.

This latest small increase in the savings variable is the second in a row, which could lead to a return of reduced competition amongst providers.

Despite downward pressure on prices, the fact remains that drivers are still facing far higher motor insurance premiums, especially if they fail to shop around.

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Londoners pay nearly 50% more on their car insurance

While the cost of car insurance is not a key consideration in choosing where to live, these figures are further evidence of the huge disparity in the cost of living for people in urban areas versus rural areas. People have located to high employment areas, but doing so comes at a cost.

Our latest report shows that average premiums in one region of the country can be almost double that of another region. The average car insurance premium for Londoners is nearly 50% higher than the national average.

The figures show that the average premium for people in London stands at £1,102, which is £366 higher than the national average and £545 higher than premiums for drivers in the South West.

The large differences between prices is down to the varying risk profiles that providers judge for pricing. The cost of insurance is likely to be significantly lower for cars based in rural areas, because accidents and crime rates are statistically higher in urban areas.

For Londoners struggling with their car insurance bills, it’s essential to shop around to ensure you are on a competitive policy.

 

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Dan Hutson

Head of Motor Insurance

Compare the Market

“This is the first bit of good news for British motorists in a long time. Insurance prices have been on a relentless upwards March since 2012. A £100 drop in insurance costs between December and February indicates that a more structural reduction in premiums is taking place.

“It appears that recent policy changes implemented at the end of December around whiplash claims have had a major impact already. This is also likely aided by the reduction in the number of car registrations in the past six months, which suggests that insurers are having to compete more to win a larger share of a smaller market. With the review of the Ogden personal injury discount rate now under way, there is hope for motorists keen to see further reductions of their premiums.”

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Past reports

We carry out this research every quarter to find out what the current landscape means to you when it comes to buying your car insurance. Here you can see our previous reports to see how the industry has changed over the past year and what this means for your car insurance premium.

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