Average insurance premiums have fallen by over £100, says the AA
The average price of insuring a car in the UK has fallen by over £100 over the past year, new figures have revealed.
As part of its latest British Insurance Premium index survey, the AA says that the average insurance premium has fallen by around £30, or just over five per cent, in the first quarter of this year alone.
The company puts the drop down to a "price war" between different insurance providers, as well as stricter rules for dealing with whiplash claims bought in late last year.
The average price of comprehensive cover in the first quarter of 2014 was £531, taken from a combined analysis of brokers and price comparison sites. This represents a 5.6 per cent (£31) reduction from the previous quarter, and 16.6 per cent (£105) on the same quarter in 2013.
Young drivers’ premiums saw the biggest reductions with an average drop of 10 per cent in price for the 17-22 age category. The average insurance premium for new drivers is now £1,158.
Director of AA insurance Simon Douglas said: "It is the price war that is the driver of these unprecedented falls… some insurers could pull out of less profitable sectors of the market as a result.
"Fraud adds around £50 to the cost of every car insurance policy… I do expect premiums to start rising again this year unless the fraud issue can be dealt with."
Tougher rules on dealing with fraudulent whiplash claims were brought in last year to deal with what was referred to as the "compensation culture" of motoring.
The results are still good news for motorists. Speaking to Autocar, an AA spokesman said: "For those who are renewing insurance it’s really good news as they’re in a strong position to negotiate a cheaper quote or to shop around. Though cheapness doesn’t necessarily represent value for money, people need to make sure they get the right insurance cover for their needs."