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.

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.

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Our latest report suggests that insurance premiums have fallen by £103 since the UK’s first coronavirus lockdown in March 2020, with the average now standing at £652. This is the lowest price average since 2015.

Car Insurance Savings variable

The savings variable is the figure given to the difference between the cheapest and average car insurance quote. Today, the average quarterly premium is £652, a significant £55 drop compared to £707 from the previous quarter. This is the lowest premiums have been in nine years, down £103 year-on-year. Meanwhile, the savings variable between December 2020 and February 2021 has fallen over the past three months to 14.11%, down from 14.73%.

This latest fall in the savings variable has seen it reach a new record low, beating last month’s record and down from its high of 17.62% in Q1 2017. This is partly due to competition levels rising sharply between car insurance providers, with the gap between the average and cheapest premiums narrowing, but traffic still hasn’t returned to pre-pandemic levels, with many commuters still working from home, clocking up fewer miles. This is then reflected in the cost of premiums.

Car insurance prices drop to a nine-year low

The continued drop in savings variable can largely be credited to the heavy restrictions the UK has faced throughout 2020 and into 2021. The effects of various lockdowns have seen us travel far less than usual, with many workers swapping their daily commute to a makeshift home office.

This has led to average premiums continuing to fall throughout the last 12 months, as less road traffic leads to fewer accidents and, therefore, fewer claims.

However, as the UK begins its journey through the lockdown easing roadmap, it’s likely that traffic will steadily rise, which means this trend could begin reversing.

Want to check that you’re paying the right price for your premium? Use our interactive comparison tool to see the average premiums for similar drivers to you.

Interactive comparison tool

Dan Hutson

Head of Motor insurance at Compare the Market

“Motorists will be thrilled that the cost of car insurance has nosedived in the first quarter of this year. The drop in insurance claims seems to be trickling through to the cost of premiums. Drivers will appreciate the savings as many will be finding it more difficult to manage their finances during the pandemic. Premiums did initially start to sneak upwards in December 2020 but have since plummeted during the latest lockdown. This fall will be particularly good news for young drivers who typically face the highest premiums. Hopefully, more people will be encouraged to learn to drive as travel curbs are lifted and the fall in premiums makes it more affordable.

However, drivers will only be able to take advantage of the best savings on offer from lower premiums if they shop around when their policy comes up for renewal. Our research shows drivers could save £92 by switching to the cheapest deal.”

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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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