UK motorists are paying on average 5.5% less for their car insurance than they were 12 months ago, putting the brakes on increasing rates that reached new highs last year.
The decline, with the average annual bill now totalling £712, is due to insurers fighting to offer more attractive prices in an increasingly competitive industry.
The price of car insurance reached a new peak in September last year, but data analytics company Consumer Intelligence said new technology, such as telematics (black box) devices that reward safe driving with lower premiums, have helped to drag costs back down.
In particular 17 to 25-year-olds have made the biggest savings, with a 11.9% reduction in annual bills.
A Consumer Intelligence spokesman said: “Insurers are now free to compete on price without Insurance Premium Tax increases or changes to the Ogden rate, which sets compensation for major personal injury claims. That is very welcome and should provide some relief for drivers when other motoring costs such as petrol prices are on the rise.
“The downward trend should continue with the increasing adoption of telematics helping to maintain the momentum. It’s interesting that around 23% of all the most competitive quotes are now from telematics providers.”
Despite the fall, the current rates are still 21.9% higher than in October 2013, when Consumer Intelligence first started collecting the data.
Londoners pay the highest average annual premium of £1024, but that’s a fall of 5.2% on last year. Motorists of the second costliest region, the north west, pay on average £847, representing a 9.5% reduction year on year. By contrast, Scotland is the cheapest place to insure a car, with premiums averaging £522 per year, although that’s a comparably insignificant 0.1% fall on last year’s premiums.