Drivers have been backed by a fall in car insurance premiums for the first time since June 2022 as Britons continue to struggle with the cost of motoring.
New data revealed that the cost of car insurance declined by £72 on average year-on-year as the typical premium now stands at £776 – representing an eight per cent drop.
This is down from a high of £848 seen in September 2023, with experts attributing the drop to the stabilisation of inflation over the past few months.
Despite the optimism around the year-on-year price drop, the average cost of a premium rose by £14 between August and September 2024.
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Drivers are being urged to shop around as they could save up to £461
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Elderly drivers have not been as lucky as other age groups. Those aged 80 and above have seen their average premiums only decline £8 year-on-year to £637.
At the other end of the spectrum, drivers under 25 saw the largest drop in premiums, falling by £107 year-on-year. However, the average price is still a staggering £1,786.
Julie Daniels, motor insurance expert at Compare the Market, said many motorists would be “thrilled” that prices are finally falling, especially after such a long time with steep hikes.
She added: “One specific tip I’d give to drivers who want to save money on their car insurance is it’s still important to compare prices and providers online first before renewing with your existing provider.
“Whilst some drivers might see their renewal price drop, by taking that action to shop around, you’ll see how much you could save by switching.”
The expert stressed the importance of comparing prices to see if they can cut their costs, with motorists saving up to £461 on their car insurance.
She highlighted that even if the renewal price drops, they can compare prices to other providers to see if they can save even more.
It comes as Transport Secretary Louise Haigh called on the insurance industry to help motorists by slashing costs and ensuring they get a fair deal.
Last week, Haigh and Economic Secretary to the Treasury, Tulip Siddiq, spoke with industry groups, consumer champions and insurance regulators to assess what needs to change.
Data from the Financial Conduct Authority (FCA) has shown that motorists have seen insurance premiums grow by an average of 21 per cent since June 2022.
This is far higher than the likes of Germany, France, Spain and Italy. Haigh said the new Labour Government was reaffirming its manifesto pledge to support drivers.
A new taskforce has been introduced to help drive down the high costs of car insurance and will be supported by the likes of the Association of British Insurers (ABI), Citizens Advice, Which? and Compare the Market.
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A new taskforce has been created to address expensive car insurance prices
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Commenting on the new measures, Louise Haigh said: “Car insurance is an essential, not a luxury. It is vital to accessing economic opportunities and this Government is committed to getting costs under control.
“That’s why we’re taking direct action to bring insurance companies and regulators round the table to discuss how we can crack down on spiralling costs.
“Our new expert taskforce is a major step forward in delivering a fair deal for drivers. It will give this issue the attention it deserves – rooting out the factors driving up costs for industry and ensuring drivers are able to hit the road.”
