Yahoo Finance Coronavirus: Car insurance premiums fall but rate of decline slows
Car insurance premiums fell throughout 2020 – thought to be a result of the national COVID-19 lockdown, which at it's height caused road traffic to plummet by 73% but the rate of decline may be slowing.
Car insurance prices dropped by 3.6% in the first quarter of the year and then by a massive 4.7% in the second quarter, when they hit their lowest price in five years – £462 ($603) for fully-comprehensive cover.
However, a modest price drop of 0.3% in the third quarter suggests the fall may be starting to taper off, MoneySuperMarket data shows.
The average price of fully-comprehensive car insurance now stands at £473, the data shows.
What’s more, despite prices falling in 2020, annual comparisons show a slight increase, with fully-comprehensive cover costing about £473 during Q3 2019.
The study found drivers in east London pay most for premiums, at £950 – more than double the UK average.
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Meanwhile, London as a whole paid about £679 during the third quarter of the year.
On the other hand, drivers on the Isle of Lewis have the cheapest premiums in the country, at just £293.
Looking at age, premiums have fallen the most year-on-year for those aged 17 to 19, with fully comprehensive cover now costing these drivers about £823 – down 21% from £1,037 in 2019.
However, premiums for this age group did see a quarterly price increase of £46 from £777 to £823.
Drivers aged between 40 and 49 have seen the biggest price rise, with premiums up 5% year-on-year to £422, from £402.
The 20 to 24 demographic pays the most on average, with third-quarter premiums costing £917.
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Meanwhile, drivers aged 65 or over pay the least, at just £281 a year.
“Our research shows that prices continued to fall over [the third quarter of the year] but not at the same rate as the previous quarters this year,” said Dave Merrick, a spokesperson for MoneySuperMarket.
“This might be explained by the easing of lockdown measures and the ensuing increase in traffic on the roads – something which could factor into the pricing decisions of insurers.
He added: “The best way to make sure you’re getting the right policy for your needs, and at the right price, is to shop around for a better deal– doing so can save you up to £2,853.”
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