Cost of car insurance drops for the first time in two years

Cost of car insurance drops for the first time in two years

Modest reduction is a small help

DRIVERS could be forgiven for wondering whether running a car would ever stop costing them more money each year. The price of insurance and fuel, and expense of servicing and replacement parts has been rising steadily.

Now motorists car breathe a (small) sigh of relief. The average price paid for car insurance has recorded its first quarterly drop in two years.

However, before getting too excited and wondering what the savings could be put toward, the Association of British Insurers (ABI) cautions that despite the reduction, drivers are still paying record amounts for the time of year.

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The ABI’s Motor Insurance Premium Tracker found the average price paid for comprehensive motor insurance was £478, down £13 on the final quarter of 2017, as well as being the first quarterly fall in premiums in two years.

Its index began in 2012, and tracks how much drivers pay for their motor insurance, rather than quotes.

The bad news is that £478 is the highest average premium it has recorded for the first quarter of any year.

The ABI said prices are subject to seasonal trends and added that average premiums can fall in the first quarter of the year because of a boom in new car registrations in March, which boost demand and lead to more competition among insurers.

Rob Cummings, the ABI’s assistant director, head of motor and liability, said: “While this small fall in the last few months gives some relief to motorists, it is in line with seasonal trends and the underlying cost pressures from things like personal injury claims remain.”

The association says the Civil Liability Bill, which is aimed at tackling the rise of spurious compensation claims for whiplash and personal injury and is currently going through Parliament, should help lower the premiums for millions of motorists.

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