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Car insurance prices, premium drivers index

Every quarter, comparethemarket.com releases research into the latest savings index for car insurance premiums by comparing our ‘cheapest’ and ‘average’ motor premiums across all age groups and determining something we call ‘the savings variable’. The findings can help to give you an idea of how much it would pay off to shop around for your car insurance, instead of simply auto-renewing with your current provider. In general, the higher the savings variable is, the more you could stand to save by doing your homework and comparing prices.

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Car Insurance Savings variable

When it comes to car insurance, the past two years have proved to be an expensive time for UK drivers. Car insurance premiums have climbed steadily and our latest report shows that this trend is, unfortunately, set to continue.

The cost difference between the cheapest and average premiums has remained stable at £128 – that’s just £1 below the record differential found in January’s Premium Drivers report. The savings variable fell for the second consecutive quarter to 17.3%, which is down slightly from 17.4% for the previous three months. And although the savings variable has remained almost flat over the last quarter, it’s still at almost record levels, which suggests that competition between insurance providers is still very low and potentially driving up the cost of insurance. That means if your car insurance is due for renewal in the coming months, it’s more important than ever that you shop around to get a good deal.

The average motor premium has risen to £740 in Q3 2017 – that’s a £42 year-on-year increase; up from £698 at the same time in 2016. The cheapest policies have also increased in price by £33, rising to £612 from £579 over the past 12 months. In fact, insurance premiums have reached yet another all-time high this quarter; our figures show that over the past three years the average premiums have gone up by £205, from £535 in Q3 2014. This clearly indicates the financial pressure that motorists are currently under. What’s more, although the change to the Ogden Discount Rate (how compensation is calculated) that came into force in February 2017 may be partially reversed, it’s expected to have a continuing and significant impact on premiums.

Car insurance prices, premium drivers index

Car insurance prices, premium drivers index

The gender gap

As part of our latest report, we looked into how the difference in insurance costs for men and women has grown since the EU Gender Directive. Despite EU legislation banning the use of gender when calculating premiums, we found that between June and August this year, the average car insurance policy for a man was almost 27% higher than that for a woman, at £821 compared to £649.

And statistics show that the gap between the cost of the average insurance policy for men and women has widened since the EU’s legislation came into place in December 2012. In January 2013, there was a difference of almost 20%; looking at the graph, that gap has steadily increased over the past four years.

In spite of this imbalance between men’s and women’s premiums, both have increased significantly over the past year – average prices have risen by £41 for women and £46 for men ¬– so when your insurance is next due for renewal, make sure you compare insurance providers to get optimum value for money.

Gender gap in premiums
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John Miles

Head of Motor

comparethemarket.com

“The past three years have been relentless for British drivers, with the average insurance premium spiralling by 38% to £740. The past year has been particularly hard, with changes to Insurance Premium Tax and the personal injury discount, or ‘Ogden’, rate draining the pockets of motorists at a time that wage growth remains stagnant. Although the Ogden rate looks like it might be changed, some damage has already been done for drivers.”

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Past reports

We carry out this research every quarter to find out what the current landscape means to you when it comes to buying your car insurance. Here you can see our previous Premium drivers’ reports to see how the industry has changed over the past year and what this means for your car insurance premium.

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