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Drivers rejoice! Insurance premiums fall

Drivers rejoice! Insurance premiums fall

Category: Car insurance

Updated: 26/11/2012
First Published: 23/04/2010

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Long suffering drivers could be excused for raising a glass (when not at the wheel) to the news that average car insurance premiums fell in the first three months of 2010.

The average quoted premium for a comprehensive car insurance policy fell by 3.2% in the first quarter of the new year, data from the AA has revealed.

The average price of a third party, fire and theft policy (TPFT) also fell, by 4.5%.

However, this good news has been tempered by AA analysts who believe that respite for drivers is temporary, with an upward trend in premiums expected over the rest of 2010.

Simon Douglas, director of AA Insurance, said that while the fall in average premiums was something of a surprise, such trends are not uncommon in the first three months of a year.

"Most years we have seen insurers hold their premiums during the first quarter of the year, when there is greatest competition for business. It's when most cars are sold and historically, it's when most car policies are renewed," he commented.

The AA's Shoparound premium – an index of the cheapest quotes – showed a small increase, with comprehensive policy prices rising by 0.6% and TPFT cover up by 4.5%.

Annual comparisons make for difficult reading for drivers. Comprehensive cover premiums have risen by 13.4%, while TPFT, a favourite with young and newly qualified drivers, rose by 19%.

The figures also revealed that the average quoted premium for an annual policy rose by 1.8% in the first quarter of 2010, although contents cover dropped in price by 2.6% on average.

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