Financial News

  • 10 April 2014, 10:53

Car Insurance 'Drops To A Four-Year Low'

Car insurance premiums are at a four-year low, a new study has claimed.

It comes after a record 19% drop in the cost last year, according to Confused.com's car insurance price index.

The study, in association with Towers Watson, said the average comprehensive car premium in the first quarter was 596 - some 140 lower than the same period in 2013.

The figure, including a 7.5% drop on the previous quarter, takes average premiums to below 600 for the first time since late 2009.

The study said the premium reductions occurred for both male and female drivers in all age groups, including young motorists.

It said the average premium for a 17-year-old fell by 39% last year, giving them a saving of 1,400 annually.

Meanwhile, an average 50-year-old has seen a 20% drop in premiums, down to 511.

However, the study warned that ongoing price reductions over recent years are unlikely to be sustained.

Premium calculations are based on age, driver history, car specifications, location and risk factors based on occupation.

Although inner London has the highest price average of 985, Merseyside and Manchester are also high-ranking locations with an average premium of 832.

Shares in car insurers fell on the London stock market, with Direct Line down 2.4% and Admiral down 0.65%.

Shore Capital analyst Eamonn Flanagan said the report of low premiums is considered "grim reading" for the car insurance sector.

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