Drivers in South Wales are enjoying some respite from increasing car insurance costs, as premiums drop -£79 (-10%) year-on-year.
Car insurance now costs drivers in the region £693, on average, and is -£19 (-3%) cheaper than it was three months ago. That’s according to the most comprehensive car insurance prices index in the UK based on more than six million quotes a quarter from Confused.com and powered by Willis Towers Watson.
To give a view on how car insurance premiums have changed for drivers in the region, Confused.com has created a car insurance calculator, which allows drivers to search for the average price for their age and region, and compare it to other parts of the UK.
Overall, drivers across the UK are celebrating a drop in car insurance prices, as the UK average premium drops -£95 (11%) in 12 months to £752. However, new research reveals customers who renew with the same insurer are not benefitting from these savings. In fact, a nationally representative survey of UK drivers reveals those who renewed their car insurance with the same insurer between April and June this year (2018) saw their premiums go up by +£49 on average. This suggests loyal customers who choose to stay with the same insurer are not benefitting from price reductions available by shopping around. With prices expected to continue to fall in the near future, shopping around in a falling market will give customers a better opportunity to save money. And worryingly, 58% stayed with the same insurer rather than seeking out a better deal elsewhere.
To encourage drivers to take advantage of savings, Confused.com, is letting drivers in on a little-known secret which could save them up to £613 on average. Data from the driver savings site shows there is a day 21 ‘sweet spot’ for drivers which could see them receive the best price when it comes to renew. The average car insurance cost for UK drivers shopping around 21 days prior to renewal is £651. This is compared to drivers who shop around for car insurance on the same day as their renewal is due, who pay almost double (£1,264), on average. To make drivers aware of this available saving, Confused.com monitors the market and sends an email to customers to remind them to renew. And to help motorists take even more advantage of declining prices Confused.com is guaranteeing to beat drivers’ car insurance renewal price, or give them the difference plus £20.
The dramatic fall in car insurance prices since last year is testament to the impact the Ogden Rate discount had on insurers. The UK Government dropped the rate to -0.75% in March 2017, meaning insurers had to pay more for personal injury claims, which drove drivers’ premiums upwards significantly. However, insurers seem to have recovered from the shock of this dramatic change, and have been able to soften their prices. But despite UK car insurance premiums being significantly cheaper than last year, the dip on the last quarter is minimal (-£16/-2%), suggesting that prices might begin to flatten. In fact, it is likely insurers are already accounting for the anticipated review of the Ogden rate and drivers will fail to see much in the way of price reductions over the next year.
From a longer-term perspective, UK car insurance prices seem to be on a continued upward trend. Prices are still +£37 (+5%) more expensive than two years ago (£715), and +£74 (+11%) pricier than half a decade ago (£678). And prices will need to drop by -£253 before drivers benefit from the rock-bottom premiums of 2008 (Q2), when car insurance cost just £499, on average.
Despite recent price drops, some drivers are facing more expensive car insurance costs than others – particularly male motorists. Men in the UK are paying £92 more than women, although the gap has closed slightly since the previous quarter when it was £95. Insurers are unable to assess a driver based on their sex, as outlined by the EU gender directive, but there are other risk factors which cause men to have higher premiums. For example, men tend to drive more expensive cars with larger engines and loaded with new technology, on average, so they make higher-value claims. They also tend to have significantly more motoring convictions than women.
The majority of age brackets have benefitted from a decrease in their premiums, but no one more than 17 year olds across the UK who are celebrating a whopping -£403 price reduction year-on-year and are paying less than both 18 and 19 year old drivers. This is likely due to more telematics insurers specialising in 17 year old drivers entering the market. Even so, 17 year olds are still paying an eye-watering £1,889 a year for car insurance, while 18 and 19 year olds are paying £2,052 and £1,893 respectively.
As ever, male drivers aged between 17 and 20 are still paying the most of any demographic ̶ £2,294 on average, compared to the £1,660 paid by their female counterparts. While female drivers aged between 61 and 65 are paying the least and less than half the national average, with a bill of just £356.
According to Confused.com survey research, almost two out of three (61%) UK drivers say they are fed up with the rising cost of car insurance. In fact, one in three (30%) would go as far to say that it’s becoming unaffordable. But there are other motoring costs which are also pinching drivers’ pockets. According to Confused.com’s fuel price index, which collates prices from 83% of the UK’s fuel stations, UK drivers are now paying 128.0p for petrol and 131.2p for diesel, on average. This means that the average driver of a medium-sized car is now paying £72.97 for a full tank of petrol and £74.80 to fill up with diesel. And with fuel duty expected to be unfrozen in the next autumn budget, plus climbing interest rates, it looks like it is going to be an expensive year for motorists.
Amanda Stretton, motoring editor at Confused.com, says:
“Drivers in South Wales have experienced a rollercoaster when it comes to car insurance pricing. This is caused by insurers reacting to the changes in the Ogden Rate, which is used to calculate the cost of some bodily injury claims. We are very happy drivers are going to have a few more pounds in their pockets. However, often motorists don’t see these savings reflected in their renewal notices. Even when prices are coming down, we should all still shop around to get the best deal.
“Our data suggests drivers should hang on until 21 days prior to their renewal date, when car insurance prices appear to be at their lowest. We’re continuously monitoring the market to find the best renewal date for our customers, and will send them a reminder to ensure they’re getting the best deal. And if we still can’t beat the price their current insurer is charging, we’ll give them the difference, plus £20.”
