Car insurance premiums have fallen to their lowest level in four years, as lockdown has had a marked impact on driver behaviour.
The new average annual premium of £697 is a total decrease of £56 since February, according to Compare the Market. Here, we look at where premiums have fallen the most, and how you can get the best insurance deal.
How much lower are car insurance premiums?
According to Compare the Market’s figures, average premiums have fallen by roughly £33 since March; the month in which lockdown began. When Which? asked car insurers about coronavirus in April, Admiral and Ageas said they had reduced prices to reflect the coronavirus crisis. The map below shows a regional breakdown of average car insurance premiums for April, with the monthly decrease from March in brackets.
Who benefits most?
Younger drivers benefit most Drivers aged 17-24 will benefit most from these lower prices, according to Compare the Market. For this age group, premiums dropped by £69 month-on-month during April. That’s a £154 decrease since February. Dan Hutson, head of motor insurance at Compare the Market, said: ‘With young drivers facing higher driving costs than any other age group, and 63% of those aged 16-24 having previously said they will no longer be able to afford to run a car if motor costs rise, this reduction in premiums should go a long way in keeping our younger drivers on the road.’ Can I get a car insurance refund? Some insurers are doing more than lowering prices during lockdown.
Since fewer cars have been on the road, customers have made fewer claims and so insurers have made fewer payouts. Admiral announced in April that it planned to refund all car insurance customers £25 to pass on the money it would usually have paid out in normal circumstances. LV followed, but it’ll only give refunds to customers who contact it with proof the coronavirus crisis has caused them financial hardship. But you don’t have to be an Admiral or LV customer to cut your car insurance payments during lockdown. If you’ve been driving fewer miles, you can contact your insurer to lower your annual mileage, which may in turn lower your premium. Your insurer might then offer you a pro-rata refund if you’re an annual customer, or lower your payments if you pay monthly. We asked the UK’s biggest insurers about what their customers should do during lockdown in the article linked below.
How to get cheaper car insurance
If your policy is coming up for renewal, shop around to see if you can find a better deal with a different provider.
- Don’t auto-renew: Insurers rarely offer loyal customers the best deal. Which? has campaigned against this ‘loyalty penalty’ for years. Instead of accepting your current insurer’s offer, shop around to see what other insurers are offering.
- Haggle: If you do plan to stick with your insurer, give haggling a try. We’ve found that haggling saves customers £50 on average on their car insurance.
- Pay annually: It’s always cheaper to pay annually for car insurance, as monthly payments include interest, which was 25% on average when we last surveyed insurers.
- Use a broker: An insurance broker can help you find the best deal for you if you’re struggling. Use the British Insurance Broker’s Association’s (BIBA) ‘find insurance’ page for help.
- Read more Which? top tips: our car insurance guides can help you with everything from finding a policy to making a claim.