Major car insurance update with two types of drivers benefiting from reductions
The cost of car insurance has been rising sharply over the past year but there are signs that price hikes are starting to slow down, according to new data
Car insurance costs are gradually decreasing after hitting record highs last year, according to a recent index. The latest report from Consumer Intelligence revealed that annual car insurance price increases were at 9.8 per cent for the year ending in August, a significant drop from the 34 per cent average increase reported for the year ending in May.
The quarterly data also showed a decrease in cover costs in several regions, including the South West, East and West Midlands, and Yorkshire and the Humber.
The most frequent quotes for drivers in August ranged between £500 and £749, the data indicates. Consumer Intelligence noted that over-50s and Welsh drivers were reaping the most benefits from the slowdown, with average quoted premiums rising by only 2.6 per cent and a mere 0.8 per cent in Wales.
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However, Londoners continued to bear the brunt of high prices, with average quoted premiums increasing by 15.6 per cent in the year to August. The cost of cover in the UK capital is typically higher due to increased claim rates, vehicle crime, and elevated garage costs.
A study by Confused.com in January revealed that Londoners were paying a record average of £1607 to insure their cars. The UK's leading car insurance companies have been wrestling with skyrocketing inflation and energy prices, which have impacted the cost of vehicle repair, as reported by City AM.
The Association of British Insurers (ABI) previously highlighted a 300 per cent increase in energy costs at British garages.
However, recent semi-annual results indicate a downward trend in prices. Admiral reported a 43 per cent surge in turnover in August and stated it had been able to offer more "competitive" pricing to attract customers.
Max Thompson, insurance insight manager at Consumer Intelligence, commented: "While many insurers reported an easing of claims inflation as part of their half year results, claim costs remain a weight on profitability. More insurers are fighting for the perceived safer risks, with this competition driving down prices for the over 50s."
He added: "This attitude to risk carries through to regional trends, too, with London seeing increases in quoted premiums of 4.4 per cent in the last three months."
