Car Owners Benefit From Insurance Drop

Car insurance premiums have fallen over the last quarter, making it cheaper for drivers to cover the cost of their motor protection.

Findings from comparethemarket.com have revealed premiums have fallen by £27 between February and May this year, dropping from an average of £736 to £709, The Express recently reported.

The cheapest insurance policy of £598 per year is also much cheaper than during the previous quarter when it stood at £619.

Head of motor insurance at comparethemarket.com Dan Hutson said: “After years of relentless premium hikes, there is finally some light at the end of the tunnel for British motorists. Premiums are now lower on both a quarterly basis and a year on year basis.”

The price comparison site suggested the reduction in car insurance costs could be due to several governmental changes in the sector this year.

These include the rise in Insurance Premium Tax (IPT), as well as changing the personal injury discount rate. Earlier this year, the Lord Chancellor revealed he is reviewing the rate, which was reduced from 2.5 per cent to -0.75 per cent in 2017 to crackdown on claims.

Additionally, in June 2017, Chancellor of the Exchequer doubled the IPT from six per cent to 12 per cent; however, Phillip Hammond chose not to increase it again in the recent Spring Statement. 

Despite the decline in premiums over the quarter, average costs have crept up since February by an average of £9 per month.

However, according to Mr Hutson, “car insurance, like many markets, is cyclical”, making it hard to determine a trend using monthly figures.

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