Car insurance prices have fallen sharply to reach their lowest point since 2014, according to new research by MoneySuperMarket, with experts putting the drop primarily down to the significant reduction1 in driving during the pandemic restrictions.
Less drivers on the road means extra competition for insurance sales, causing insurers to lower premiums, while fewer miles driven has led to fewer claims – which makes insurance more profitable and allows providers to reduce prices and pass this benefit on to customers.
The average cost of fully comprehensive insurance in the UK fell by £73.32 to £417.06 in Q1 2021 (-15%), which represents the biggest quarter-on-quarter drop on record (Q1 2013 to present).
During the eight-year period analysed; premiums were cheapest at the beginning of 2014 when they stood at £405.47 on average. Since then, prices have fluctuated, reaching a high of £581.77 at the end of 2016.
From January to March 2021, every region across the country has benefitted from a dip in the average cost of fully comprehensive premiums.
In the West Midlands, policies were £101.54 cheaper between January-March 2021 than they were from October-December last year on average, representing a 17% fall in costs. This is the largest drop of anywhere in the UK, with Yorkshire and the Humber, the North West, the North East and the East Midlands all seeing prices fall 15%.
Elsewhere, those within the Crown Dependencies region of Jersey, Guernsey and the Isle of Man (-£19.45), Northern Ireland (-£37.19) and South West (-£38.80) saw the smallest change in their premium costs for fully comprehensive car insurance.
Percentage difference of average cost of fully comprehensive car insurance premiums by region
| Location | Average cost of premium Jan – March 2021 | Difference in premium cost from Jan – March 2021 compared to cost in Oct – Dec 2020 | Percentage difference |
| West Midlands | £480.63 | -£101.54 | -17% |
| North West | £486.65 | -£88.58 | -15% |
| North East | £379.68 | -£68.90 | -15% |
| East Midlands | £397.53 | -£71.92 | -15% |
| Yorkshire and the Humber | £449.71 | -£76.34 | -15% |
| Wales | £339.75 | -£57.49 | -14% |
| Scotland | £324.31 | -£52.39 | -14% |
| East | £368.05 | -£58.50 | -14% |
| South East | £351.70 | -£55.20 | -14% |
| London | £607.73 | -£82.57 | -12% |
| South West | £291.08 | -£38.80 | -12% |
| Northern Ireland | £435.49 | -£37.19 | -8% |
| Crown dependencies | £276.25 | -£19.45 | -7% |
Premiums for fully comprehensive car insurance are cheapest on average in the Crown Dependencies (£276.25), as well as the South West (£291.08) and Scotland (£324.31). They are most expensive in London (£607.73).
Looking at age groups, premium costs have taken the biggest dip for drivers aged between 17 and 19 – down by more than a third (37%) compared to the last months of 2020, costing £504.85 on average. Driving tests have been cancelled until current lockdown measures are eased, and fewer new young drivers mean that average premiums have dropped sharply for this age bracket.
| Age | Average cost of premium Jan – March 2021 | Difference in premium costs from Jan – March 2021 compared to Oct – Dec 2020 | Percentage difference |
| 17 – 19 | £504.85 | -£296.75 | -37% |
| 20 – 24 | £870.78 | -£110.05 | -11% |
| 25 – 29 | £636.16 | -£88.48 | -12% |
| 30- 39 | £495.35 | -£68.67 | -12% |
| 40 – 49 | £378.56 | -£52.13 | -12% |
| 50 – 64 | £274.15 | -£29.77 | -10% |
| 65+ | £258.23 | -£16.21 | -6% |
Fully comprehensive car insurance is the most expensive for drivers aged between 20 and 24, who pay £870.78 on average. However, this is still down 11% from £980.82 in the last three months of 2020.
You can find out more about car insurance prices and how they have changed across the UK on the MoneySuperMarket website.
