February 2022
Groceries are going up.
Petrol and diesel are going up.
Car insurance is going… down?
Hang on just a minute can that be right?
In amongst all the news of the increasing cost of living, how can something as fundamental as car insurance be getting cheaper?
It may sound unbelievable, but if you’ve tried to renew your car insurance in the last couple of months you will probably have been pleasantly surprised by the savings on offer, even if you decided to stick with your current provider instead of shopping around.
This ‘anecdata’ is borne out by the real data, which suggests that motor premiums are at a seven year low, with the average annual insurance quote coming in a whopping £8 cheaper than this time last year.
Information captured by
Compare The Market show that the average quote in the final 3 months of 2020 was £721, and in the same period in 2021 it had fallen to £640.
What’s causing this anomaly in the flood of other price rises that have been battering consumers lately?
The most significant driving force is a new set of rules that were brought into action in January 2022 by the
Financial Conduct Authority (FCA) designed to prevent insurers from offering discounts exclusively to new customers.
While the regulations are designed to stop existing customers from being penalised for loyalty, insurers may then choose to increase premiums for new and existing customers from January to make up the difference.
It’s common for car insurance premiums to fluctuate through the course of the year, and the ‘average’ reported for the final quarter of 2021 actually hides a trend of increasing premiums between August (£622) and December (£689).
Several factors influence insurance premium quotes, the most obvious of which is age. Premiums have reduced even for young drivers however, dropping an average of an astonishing £298 if they were prepared to shop around.
Other factors include location and the value of the car, and
Compare The Market have launched a premium tool to help you check and see if you’re paying too much.
By entering your age, location and the value of your vehicle the tool will quickly be able to tell you how you compare with other drivers in your area of a similar age and in similar cars.
There’s no opt-in required to use this tool and you get the results within seconds.
