The 18-month downhill ride in car insurance premiums has come to a halt, according to the AA's latest British Insurance Premium Index.

Car insurance premiums rose slightly over the last quarter of 2004, but the AA Index shows no sign of the steep rise in premiums.

Meanwhile, the cost of insuring home buildings and contents has remained virtually unchanged.

AA insurance director Neil Phillips said the Index was reflective of a “stable market”.

The index showed that car insurance premiums rose by just over £2 to £756 in the past three months, but over 2004 fell by £22, or nearly 3%.

The average quotation for third party, fire and theft also rose, by 0.6 %.

Phillips said: “We believe the cost of car insurance will remain relatively flat over the coming year – it's unlikely to rise any faster than inflation.”

Home insurance, he said, was still “value for money”, with buildings insurance premiums rising 1% in the last decade.

The Index showed people who “shopped around” for their insurance were likely to make savings of up to 30%.

The AA Shoparound index said premiums fell by around 1% for home and comprehensive car insurance, although the shoparound price for non-comprehensive car insurance rose by nearly 3%.