Coronavirus pandemic drives down the cost of car insurance

by Brean Horne from Moneywise |

The average motor premium plummets to £697

Drivers could make a big saving when insuring their vehicles as motor premiums have fallen to their lowest level in four years, according to comparethemarket.com.

The average car insurance premium plummeted to £697 in April this year, £33 less than the month before, the price comparison website found.

Premiums have fallen by £56 on average since February, when the coronavirus outbreak began to take hold in the UK.

Why is car insurance cheaper?

Fewer cars have been on the road since the government lockdown was introduced in March, which has led to the number of accident claims falling.

This has allowed some insurers to offer lower premiums to new customers.

Cheapest areas for car insurance

Drivers in the South West of England paid the least for car insurance in April. The average premium in the area was £518.92.

Scotland was the second-cheapest region for region for car cover, with motorists paying an average of £552.24.

The price of motor insurance in Wales came in third cheapest and cost drivers just £575.82.

Motorists in Greater London faced the most expensive car premiums in April.

The average premium in the area was £1,049.42, more than double what drivers in the South West paid.

The table below shows the average cost of car cover in each region for April 2020.

Region Average premium
South West £518.92
Scotland £552.24
Wales £575.82
South East £604.95
East Anglia £637.09
East Midlands £652.33
North East £667.23
Northern Ireland £689.31
Yorkshire and the Humber £746.11
West Midlands £774.51
North West £788.95
Greater London £1,049.42

Source: comparethemarket.com

Younger drivers save the most

Drivers aged between 17-24 have benefitted the most from the latest reductions in car insurance prices.

Premiums for this age group have dropped by £69 month-on-month during April, a total decrease of £154, or 12%, since February.

Dan Hutson, Head of Motor at comparethemarket.com says: “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.”

Getting a car insurance refund

At the end of April, car insurance providers started to refund customers or offer them cheaper premiums because the lockdown meant fewer people were driving.

Admiral was the first to announce that it would be offering a £25 flat-rate refund to all its car and van insurance customers.

This was followed by LV, which now offers refunds of up to £50.

Other top ten car insurers told Moneywise they were are also considering refunds or offering discounts to customers.

It may be possible to get a reduction in your premium if you get in touch with your provider.

For example, they may be able to reduce your mileage, if you are not driving as much due to lockdown, which will bring down your premium.

How to get cheaper car insurance

Whether you are looking for a new car insurance policy or hoping to renew, these tips can help you find the most competitive car cover.

1) Do not auto renew

Loyalty does not pay when it comes to insurance and providers often reserve the best deals for new customers.  Shopping around for car cover can help you find the best offers.

Price comparison websites allow you to compare hundreds of deals quickly and easily. It is also worth researching the level of customer service each provider offers, to ensure that any claims and queries would be handled efficiently.

2) Read the terms and conditions carefully

Once you have got a few providers in mind, read the terms and conditions of each policy carefully to make sure you will get cover for the things you need.

If anything is unclear, get in touch with the provider for clarification. Once you sign up to a policy, you will not be able to claim for things that are expressly excluded.

3) Pay annually

Paying for car insurance in one lump sum is usually cheaper than monthly instalments.

This is because paying monthly is essentially like paying off a loan, and providers add interest to each payment.

If you cannot afford to pay it all in one go, it is worth trying to get a 0% interest credit card to make the payment.

That way you can benefit from a cheaper premium and repay in monthly instalments without incurring interest.

This article was originally published in our sister magazine Moneywise. Click here to subscribe.

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