Car insurance premiums have been falling in recent months. In fact, you could save up to £433 a year by shopping around.
According to the latest survey, car insurance premiums have fallen back this year, after hitting an all-time high at the end of 2006.
According to the quarterly British Insurance Premium Index published by The AA, the average annual premium for a comprehensive car insurance policy fell from £806 at the end of last year to £802 at the end of the first quarter of 2007. The average premium paid for third party, fire and theft (TPFT) cover fell by a similar percentage, from £999 to £993 a year.
Although a saving of £4 isn't huge, and equates to a fall of just 0.5%, The AA's latest survey indicates that car insurance premiums have stopped going up relentlessly each quarter -- for now, at least. In the last quarter of 2006, the average comprehensive car insurance premium went up by 4.4%, so it's good news that this trend hasn't continued into 2007.
Still, although insurers appear to have applied the brakes to premium hikes, this is likely to be a temporary respite. The ever-increasing cost of repairs, medical treatment and fraud means that the underlying pressure is still upward, so premiums are sure to begin rising again later this year. Nevertheless, as the following table shows, it's pays to shop around instead of automatically renewing year after year with the same motor insurer:
Cover | Average | Av. | Quarterly | Yearly | Shop | Shop. | Qtly |
|---|---|---|---|---|---|---|---|
Comp. | 802 | 806 | -0.4 | +5.8 | 465 | 468 | -0.7 |
TPFT | 993 | 999 | -0.6 | +3.8 | 560 | 548 | +2.3 |
As you can see, the difference between the average annual premium for comprehensive insurance at £802 and The AA's Shoparound premium (the average of the lowest three premiums) at £465 is a handsome £337 a year. The gains made by shopping around for TPFT cover are even higher: why pay £993 when you can pay as little as £560, for a saving of £433 a year?
What's more, comprehensive car insurance premiums rose by an average of 5.8% in 2006, so it's worth checking your next renewal notice to see by how much your insurer has hiked your car insurance. If it's 6% or more, ask why -- and then demand a reduction, or you'll take your business elsewhere.
Finally, drivers aged under 21 are five times more likely to have an accident than those aged over 35, so young drivers struggle to afford comprehensive car insurance. Hence, young drivers usually buy third party, fire and theft insurance, so it's vital that they too shop around for good-value cover.
More: Our car insurance service searches 97% of the online market to find you a better deal!