The average annual cost of car insurance premiums across all age groups and regions has dropped to £697, according to research by comparison site comparethemarket.com, the lowest level since 2016. Prices have plummeted by £56 since February alone, when the number of coronavirus cases in the UK started to rise.
Dan Hutson, head of motor insurance at comparethemarket.com, said: “As the Government lockdown has led to fewer cars on the road, there has been a drop in claims, possibly allowing some insurers to offer lower prices to customers. The latest reductions in car insurance costs are good news for drivers and should help to ease some pressure from those who are concerned about their household finances.”
If your car insurance is up for renewal soon, make sure you shop around for cover to ensure you get the best possible deal. According to comparison site GoCompare.com, its customers save an average of £283 by switching car insurance providers.
Could you get an insurance refund?
If you’ve got several months to go before your current policy ends, and you’re likely to be working from home for the foreseeable future, it’s worth contacting your insurer to see if they might agree to reduce your premium.
Some insurers have already announced car insurance refunds to reflect the fact fewer of us have been on the roads during the lockdown. For example, insurer Admiral is giving a £25 refund to all customers for each car and van covered by it on April 20. The refund will be credited to customers’ accounts automatically by the end of May. LV= has also said it will provide refunds of between £20 and £50 to its car and motorbike insurance customers, but only if they can prove coronavirus has left them worse off financially.
If you pay monthly for your car insurance and are struggling to keep up with your payments, from Monday (May 18) insurers must offer customers greater flexibility, including allowing them to defer payments for up to three months. Insurers must also agree to waive fees for cancellation or any amendments, such as reducing annual mileage for car insurance. These new measures are temporary and will be reviewed after three months.
Lee Griffin, chief executive of GoCompare.com, said: "“Insurance, and car premiums particularly, can be a significant monthly outgoing for many people and millions of households are facing a period of reduced income as a result of the current pandemic. These steps will hopefully ensure that these customers can reduce their outgoings while remaining insured and protected.”
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Remember that car insurance is still compulsory even if you’re not currently using your car. You only don’t have to insure your car if you keep it off the road and you’ve got a valid Statutory Off-Road Notification (SORN) from the DVLA.