Are Car Insurance Premiums Finally Levelling?

At long last, it appears that insurance premiums are finally smoothing out, with a host of young drivers actually seeing a drop in their premiums.

According to the latest AA British Insurance Premium Index, two years of increases in charges seem to be coming to an end after the average cost of an annual car insurance premium rose by 3.6% over the past three months to £923.90, the smallest rise for a whopping 18 months.

For drivers aged between 17 and 22, premiums have dropped by 5.6% during the quarter. The AA’s research found that home insurance had seen premiums fall very slightly over the second quarter of 2011.

The easing of car insurance costs is extremely welcome news, especially for young drivers whose premiums were so extortionate that a owning a car was almost out of the question. Regionally, the biggest jump in car insurance premiums over the April to June period was London with a 4.8% rise bringing premiums up to an average of £1,069.

Interestingly, the lowest rise – 0.7% was in the Border-and-Tyne-Tees area whilst the most expensive place to insure a car is currently north-west England where annual premiums average a huge £1,521. Scotland is the cheapest place to insure your car with average premiums of just £556.

Rewinding back to the start of 2011, the year began dismally for drivers. The first three months of the year, typically a time when premiums are stuck solid, saw the average quotes rise by 5.9%. In the mean time, the AA’ s index showed the average quote for third-party, fire & theft went up by a massive 10.7% in the first three months of 2011 – this then continued to soar by 82%.

So what happens next? A recent report by business advisers Mazars warned that young driver premiums still look likely to increase by 50% in future, resolutely making car insurance unaffordable for most drivers in this age group.

June 2011 saw the research published by Confused.com showing that car insurance premiums were likely to rise dramatically for newly-qualified drivers who could expect to pay £2,000 to insure a small hatchback. However, the recent AA report does indicate that prices are not going up at quite the alarming rate that they were before – a small positive amongst all the pound signs.

Remember to research thoroughly before choosing an insurer – using comparison sites like Compare Insurers will present you will all of the necessary information and you will able to see the cheapest quotes easily.