Car insurance is the lowest it's been in seven years.
The trend means that drivers can now expect to pay roughly £56 less on their insurance in 2021, according to research by Money Supermarket.
And the good news is – rates could continue to fall year on year!
Drivers between 17-24 are expected to benefit the most from the drop in prices. For this age group, premiums have dropped £154 since February.
The change in charges seems to be a knock-on effect of lockdown as people are using their cars less and less. Many are not commuting regularly or at all anymore.
Some people have even got rid of their cars all together – or reduced down to one vehicle per household.
Another trend that is emerging is the new subscription style rental service where people can 'Pay As You Drive' – meaning that purchasing patterns are down and less people are willing to fork out for their own car. This could lower premiums even more.
The downwards trend has resulted in a dramatic reduction in insurance claims made – which has had an impact on the insurance companies, according to EY’s UK Motor Insurance Results.
'The drop in claims last year meant insurers were able to pass on savings to their customers through reduced premiums' said Tony Sault, UK general insurance market lead at EY.
'As commuting patterns change, perhaps for good, we expect the downward shift in car usage and claims to continue' claimed Tony.
Martin Lewis shares how couples can get up to £340 in free money from banks
Insurance costs were relatively standard all through 2020, so it was a nice surprise for UK drivers when they suddenly fell at the start of the year. This fall happened as insurers were able to predict the lockdown restrictions for the first time.
Whiplash claim reforms
This year has not only seen a shift in how people use their cars, there have also been changes to whiplash claims.
The new changes aim to stop insurers paying out over £1.5 billion for phoney insurance claims by banning any settlement that doesn't have a doctor's note. It should also make the legal process simpler for those that have a genuine claim to make.
Recent stats show there were 650,000 road traffic injury claims in 2020, of which 550,000 were whiplash-related.
By massively reducing the amount of fraudulent payouts, insurers have pledged to pass on their savings to customers – supposedly resulting in even lower insurance costs.
Car tax changes to impact more Brits as rules set to launch in four other areas
How to get cheaper insurance
If your plan is up for renewal then take a look around to see if you can get a better deal with a different provider.
It's recommended that you use an insurance broker if you are not very savvy or just need a hand looking for the best plan.
Loyalty is not often rewarded by car insurers, so avoid auto-renewing if you want a good offer. If you want to stick with the provider then you can always try and haggle them down.
You should also pay annually in order to get a decent deal as this can be up to 25% cheaper than if you pay in instalments.
Source: Read Full Article