Car insurance Updated:
The cost of car insurance is a bugbear for just about every driver, but unfortunately, the latest research from Consumer Intelligence won't exactly improve anyone's feelings towards it, as the price of an average policy is on the rise. However, not everyone will have to put up with such a trajectory – and interestingly, it's younger drivers who could benefit the most.
The figures show that car insurance costs are definitely accelerating, with the average best buy premium rising by 4.6% between August 2014 and 2015. However, there are clear variations according to age: those aged under 25 are actually enjoying a drop in premiums, with the price of a typical policy for this age group falling by an impressive 5.5% over the same 12-month period, while those aged 50+ are facing an average increase of 8.6%.
It's a growing trend, too. Additional figures show that, between October 2013 and August 2015, the cheapest car insurance premiums available fell by 20.6% for those aged under 25, but they rose by 13% for the over-50s and by 6.7% for those aged 25 to 49. This may come as a surprise as it goes against the formerly typical pattern of car insurance costs, as it's generally assumed that younger drivers will have to bear the brunt of price increases.
However, while it's true that they still pay the most overall – the average cheapest premium for all motorists stood at £696 in August, but for motorists aged under 25 it was £1,680 while drivers aged 50+ could enjoy premiums of just £258 – the rising uptake of black box insurance policies means that many younger drivers are actually benefiting from price cuts.
Black box (or telematics) insurance policies involve a device being fitted to your car that tracks your standard of driving. It can gauge everything, from the speed you're going to your cornering ability, and it'll build up a picture of how well – and crucially, how safely – you drive. The data goes straight to your insurer, and from there they can determine how good a driver you are and whether or not you'll qualify for a reduction in premiums, because quite simply, good drivers will pay less.
It's for this reason that the average cost of premiums is falling, and this kind of policy is gaining popularity, too – 46% of the most competitive quotes for under-25s now come from telematics providers, compared with 32.5% last October, and given the savings that can be made, it isn't hard to see why.
"Younger drivers are seeing the benefits of the innovation in the market such as black box policies, and that is reversing the massive increases seen at the turn of the decade," said Ian Hughes, chief executive of Consumer Intelligence, but he points out that older drivers are, to an extent, helping to fund the premium reductions for younger motorists.
This makes it even more important for them to ensure that they're receiving the best value for money from their insurer, and the best way to do that will be to compare quotes. Indeed, this applies no matter what age bracket you fall into, so make sure to check out our price comparison tool to see if you can avoid the price hike and keep your premiums in check.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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