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Car insurance prices, premium drivers index

Every quarter, comparethemarket.com releases research into the latest savings index for car insurance premiums by comparing our ‘cheapest’ and ‘average’ motor premiums across all age groups. The resulting figure can help to give you an idea of how much it would pay off to shop around for your car insurance. In general, the higher the savings variable is, the more you could stand to save by doing your homework and comparing prices.

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Car insurance vs inflation

Car Insurance Savings variable

The last two years have been a tricky time for British motorists, as car insurance premiums show no sign of slowing down. These graphs show that the cost difference between the cheapest and average premiums has remained stable at £127 – just £1 less than last quarter. The savings variable itself has reached 17.3%, down slightly from 17.6% the previous quarter. The small shift could indicate that there is a lack of competition among insurance providers. But this continued high variable means that there could be more opportunities than ever for you to make savings if you compare prices at renewal time.

The average motor premium has risen by £52 year-on-year to £731 in Q2 2017, up from £679 at the same time last year. The cheapest policies have also increased in price, rising £40 from £564 to £604 over the past 12 months. Insurance premiums have reached an all-time high this quarter; we’ve found that average premiums have risen £192 over the last three years, from £538 in Q2 2014, showing how much harder it has become for drivers. What’s more, increases in Insurance Premium Tax and changes to the Ogden Discount Rate (how compensation is calculated) are expected to lead to further growth in annual premiums. 

Car insurance prices, premium drivers index

Q1 savings varaible: 17.3

Car insurance prices, premium drivers index

Getting your timing right

As part of our latest report, we looked into how your timing can affect your premium when switching your car insurance. It can have more of an effect than you might think.

Car insurance in general is seasonal, as prices tend to spike in December, fall in January and then recovering over the rest of the year. However, our latest report seems to show that even this seasonality can’t protect consumers as premiums continue to grow even against the trend so it’s even more important to shop around.

Your timing really can work in your favour in other ways. The best time to switch provider is three weeks before your renewal date. Those who switched 21 days before their policy was up for renewal saved £349 more on average than if they switched on the renewal date – so make sure you put a note in your diary to make the most of the savings on offer. 

Premiums over time
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Simon McCulloch

Director

comparethemarket.com

“The last two years have been relentless for British drivers. The past year has seen premiums jump by more than £50 as changes to Insurance Premium Tax and the ‘Ogden’ rate have hit the pockets of motorists. As average premiums have gone up, so have the cheapest premiums available. The average cheapest premium in Q2 was £604 which is up by almost £40 on the year before. However, with difference between the average and cheapest premium almost at its highest ever level, now is the optimal time to shop around take advantage of the savings available.”

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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 Premium drivers’ 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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