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Average cost of car insurance falls 12.5%

Published 21 January 2014

The average cost of comprehensive car insurance fell by 12.5 per cent in the last three months of 2013, according to latest Confused.com Car Insurance Price Index.

On average, a comprehensive car insurance policy will now cost £644, while third party fire and theft experienced a year-on-year drop of 7.5 per cent, with 12 months cover being £1053.

Since the EU Gender Directive, which took effect just over a year ago (December 2012) insurers are no longer able to use gender as a factor when pricing insurance. This move to equalisation looks like being good news for the majority of drivers. In fact, all age groups have seen a reduction in the amount they are being quoted for car insurance over the last 12 months.

Young men have been the main beneficiaries of comprehensive price reductions over 2013, with 17-20 year olds seeing their premiums fall by 23 per cent.

However, young women, who initially suffered from the anticipation and introduction of gender neutral pricing, have also benefitted from a generally soft market in 2013. In fact, females aged between 21-25 saw the biggest year-on-year fall of 14 per cent, bringing their average insurance premium down to £936.

Gemma Stanbury, Head of Car Insurance at Confused.com said: “With the EU Gender Directive coming into effect at the end of 2012, it’s clear to see that the insurance industry has reacted to the change in legislation over the last year.

“Prices between men and women have balanced out over the year seeing a price difference of only £61, compared to a significant price difference of £112 (males £807 compared to females £695) seen in Q3 2012.

“Comprehensive car insurance prices have fallen by 12.5 per cent in the last year, bringing premiums to an average of £644. These falling prices are welcome news for motorists; however the latest car insurance price index highlights that price rises could be on the horizon with some males already experiencing price hikes in the last quarter."

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