Car insurance prices drop by largest amount in seven years

Car insurance costs have fallen by the largest amount in seven years due to drivers spending less time behind the wheel, new figures show.

Average premiums in the UK between January and March were £87 lower than the same period in 2020, according to price comparison website Confused.com.

That is the largest annual decline since the 12 months to the first quarter of 2014.

The firm said the latest figures reflect the reduced level of risk on the road, with a survey of 2,000 motorists indicating that average annual mileage has fallen from 7,239 to 4,113 during the virus crisis.

Confused.com’s car insurance price index, which is based on more than six million quotes, found that the average annual cost of car insurance between January and March was £538.

The survey suggested that not all motorists are benefiting from cheaper insurance, with 45% of those who received their renewal quote in the past three months seeing the price increase by £45 on average.

Nearly half of that group (48%) chose to stay with their current insurer, despite the increased cost.

Confused.com chief executive Louise O’Shea said: “It’s been just over a year since we went into lockdown for the first time and this triggered a lot of changes in how we’re using our cars.

“And this is a change that could be here to stay for the foreseeable future, so it only seems right that our car insurance costs are cheaper to reflect this.

“What we are seeing is the biggest drop in prices in almost six years. But it’s important to remember that these lower prices are only benefiting those who shop around.”