Premium Drivers index
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.
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Our latest report suggests that insurance premiums have risen to an average of £730. While the previous quarter saw a slight drop, the end of the year has seen that trend reverse, with a sharper increase taking us closer to averages seen back in April 2018.
Car Insurance Savings variable
The savings variable is the figure given to the difference between the cheapest and average care insurance quote. Today, the average quarterly premium, across all age groups, has risen to £730, an increase of £23 compared to £707 in the previous quarter. Meanwhile, the savings variable in September – November 2019 has expanded over the past three months to 15.49%, up from 15.39%.
The savings variable has been falling steadily since Q1 2017, when it reached a high of 17.62%. The greatest difference between the cheapest and average premiums was in 2016, suggesting that drivers who failed to shop around were missing out on considerable savings.
The savings variable was quite flat throughout the quarter, only ranging between 15.37-15.81% over the three months, but the sudden rise in savings variable may suggest that premiums are on the rise, once more. The widening gap may result in less competition between insurance providers, which may hit UK drivers harder.
Premiums Back On The Rise
After a slight fall last quarter, car insurance premiums have risen more sharply towards the end of the year. This may be the result of a rumoured delay to changes in whiplash reforms. If introduced, we will likely see premiums fall, yet some insurance providers appear to be increasing premiums in the short term, to factor in this possible delay.
Another potential cause for the rise in cost, is the fact that the Ogden rate, along with inflation, have risen, further contributing to a rise in prices.
Head of Motor insurance at Compare the Market
“Sadly, for Britain’s motorists the recent downward trend for cheaper premiums has stalled. While premiums tend to be higher towards the end of the calendar year, claims inflation, mooted delays to whiplash reform and the change in the way the Ogden rate is calculated could all be driving premiums up. These factors could continue to weigh on the cost of car insurance going into 2020.
“One of the easiest ways to save money on your car insurance is to switch provider regularly. The difference between the cheapest and average premium stands at over £100 – far more than small change for most people.”
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.