Drivers in London pay up to £700 more than those in the Isle of Man for their car insurance, despite a record drop in premiums across the country, new research from the AA has revealed.
Its latest British Insurance Premium Index found that the average premium for an annual comprehensive policy fell by 6.1%, or over £30, to £504.29 in the three months to June 2014. Over 12 months, premiums dropped by more than £120 (19.3%) – the largest ever yearly fall recorded by the index in 20 years.
However, there is still a significant discrepancy in the amount drivers pay across the country. For example, those in the capital are quoted a whopping £922.44 a year on average, while those in the IG postcode (Illford, Chigwell, Woodford Green and Barking), pay an average £912.07.
This compares to just £231.49 for those on the Isle of Man, followed by £252.72 for those living in Orkney. The cheapest mainland postal area is TR in the south west of Cornwall at £279.72, less than a quarter than prices quoted in the capital.
Janet Connor, managing director of AA Insurance, said the figures highlight the range of factors which make-up a policy quote.
"The premium reflects the likelihood of a claim being made and, in some urban areas, there is much greater risk of a collision taking place, or of car crimes such as theft of or from a vehicle, uninsured driving or attempts at 'cash for crash' fraud," she said.
"Sadly, the criminality of some people has a detrimental effect of the premiums paid by honest motorists in such places.
"But over the past year premiums have, on average, fallen in most areas of the UK and, encouragingly, some of the biggest falls have been in postcode areas that traditionally have paid the highest premiums." The research backs up new figures from the British Insurers Brokers' Association (Biba) that found that home and car insurance premiums fell by 4.9% in the second quarter of this year, compared to the same time last year.
It reported a 5.6% drop in car insurance and a 4.2% drop in home insurance. Graeme Trudgill, BIBA's executive director, said: "Overall this is great news for customers and shows that the government and industry initiatives are working to reduce the cost of motor insurance." Compare car insurance quotes from more than 130 insurers