Car insurance prices have, on average, sunk to the lowest since 2015, the Association of British Insurers (ABI) announced today.
Comprehensive prices, which are now at £416, dropped 5 per cent compared with 2021 levels following the Financial Conduct Authority’s decision to offer both new and returning customer the same tariff, and end “loyalty premiums.”
According to the ABI, the new policy means that new customers are now getting the short end of the stick, as the average premium paid was £105 higher than renewals.
New policies, on average, cost £480 – £34 higher than 2021 – while renewals are around £375 – down by £55.
“While it is going to be extremely challenging for these to be absorbed, insurers are doing all they can to keep prices as competitive as possible as millions of household cope with the cost-of-living crisis,” said ABI’s director of general insurance policy James Dalton.
“As the FCA has said, the impact of their reforms to pricing rules introduced on January 1 this year could lead to some consumers paying higher prices if they used to benefit from significant new business discounts.
“For some it could still pay to shop around for the policy that best meets their needs.”
The news follows data from last week which highlighted that car insurance premiums had risen for the first time in 18 months.
According to financial services company Confused, insuring a vehicle is £12 more expensive than it was a year ago, City A.M. reported.