Car insurance prices drop to two-year low
The average cost of an annual car insurance policy has dropped to £400, the lowest since 2023 and £14 cheaper than the previous quarter.
The analysis from Go.Compare has also revealed a strikingly small difference between the cost of the two main types of car insurance – with third party, fire and theft being just £1 cheaper than the average fully comprehensive policy.
Remarkably, the most expensive cover is the most basic policy available on the market, with the average third-party only policy costing a whopping £533 a year.
The Go.Compare figures reveal that where you live still has a big impact on car insurance prices. The average premium for those living in Greater London is, at £575, the highest in the country, although it did see a 4% quarterly fall.
Meanwhile, those in Wales pay the least, at £324 a year – a full 84% less than those in London. The steep difference is largely down to London’s greater traffic and higher risk of cars being damaged or stolen.
"It’s great for motorists that this downward trend in car insurance prices is continuing," says Go.Compare’s Tom Banks. "Let’s hope it continues for the next quarter, so more drivers can take advantage of the reductions, no matter what time of the year their car insurance is up for renewal."
Perhaps inevitably, he advised motorists don't just auto-renew when their car insurance is up for renewal, using comparison sites to "take a look at what the market is doing – you might be pleasantly surprised."
"It’s so important to shop around when your car insurance comes up for renewal, even if your renewal quote is cheaper than your premium from the year before.
"Very rarely are two car insurance policies the same and that’s why it’s important to evaluate what’s important to you," he adds.
Ask HJ
Do I have to declare an accident to my insurer even if there's no claim?
I dinged a parked car. It was my fault and I saw that I left two scratches on their rear bumper and a patch of scuff marks on my front bumper. I left a note for the owner. The wwner phoned and was adamant they wanted to go through insurance and not sort it out privately. So I reported the accident to my insurance. I did ask about claiming for my damage, which is just some scuffs on corner of the my bumper. To my surprise they said it was not economically viable to fix, so If I did claim, they would offer me (after excess) £3.5k for the car (2010 Subaru Impreza RX 2.0) or I buy the car back and I get £2.8k but car is now Cat N. I was hoping to sell the car privately for £3k.
As I have reported the accident, and as my fault, even if no claim from the other party comes through, it will still be on my profile and for any future insurance premiums I will have to declare this? So thus my risk profile and likely premium cost will be higher for next 5 years or so?
Is reporting an accident just as bad for risk profile as an actual claim taking place? My insurer didn't want to confirm these. I couldn't get a straight answer.
I would ultimately prefer to not have any marker or something I have to disclose as I know that most likely will mean the risk algorithm will make my premium sky rocket. But if it is too late for that, maybe I will just take the payout for the car, short term get a bit more cash than I was expecting and bite the bullet for higher premiums in future?
It’s important to remember that you should report any type of incident to your insurer. This applies whether you’re claiming or not. Once you have reported an incident, whether it’s considered a fault claim or not, it will be shown on your record. This is regardless of whether the other party makes a claim or any damage you claim for yourself.
This will stay on your record for the next 3 - 5 years and you will need to declare it when taking out insurance during this time. And this could have an impact on your future premiums within this timeframe.
Answered by Rhydian Jones
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