Motor rates hit lowest levels for more than two years

The average motor premium has fallen to its lowest level since prices peaked in 2011.

The latest figures from the Confused Car Insurance Price Index in association with Towers Watson released today have revealed that prices have fallen 24% since Q2 2011.

The average comprehensive car insurance premium for Q3 2013 is now £652, a 13.9% decrease on the same period in 2012 when the average premium for UK drivers was £757.

Confused head of car insurance Gemma Stanbury said: “In the last three months we’ve seen a significant reduction in car insurance prices across the board, seeing premiums drop by an average of 13.9% year-on-year. It’s great news for most motorists as their average premium is now £191 cheaper than it was two years ago.

“Falling car insurance premiums are welcome news for motorists who may well be feeling the pinch as a result of rising rates of inflation. We would recommend that motorists take advantage of these latest price drops, not just accept their renewal price.”

The effects of the Gender Directive

However, these price drops have not benefitted all of those driving in the UK.

The implementation of the Gender Directive in December 2012 banned the use of gender as a pricing factor for insurance policies. The result of this is that young female motorists, who have traditionally benefitted from lower premiums, have seen a sharp uplift in their premiums since the directive came into force while young males have benefitted from falling rates (see graph below).

Compared to Q3 2012, premiums for males aged 17-20 have fallen by 41%, knocking almost £1,000 of the average premium. In contrast, females aged 17-20 have faced premium increases of 8%.