Amidst all the stress and uncertainty of COVID-19, there’s a sliver of good news for motorists across the UK. Car insurance costs have reached their lowest levels in four years. The new average annual premium, calculated by Compare the Market, is now £697 annually. Read on to find out more….
Benefitting from reduced accident frequency
According to their research, car insurance prices decreased by an average of £56 since February and £33 since March when restrictions were first introduced. For younger motorists, aged between 18 and 24 years, premiums fell even further – £69 in April and £154 since February.
These savings are thanks to dramatic changes in driver behaviour. According to the Department for Transport, traffic levels fell by as much as 73% during lockdown, and the Association of British Insurers (ABI) reported fewer collisions. As a result, insurers are expected to have saved £1 billion in avoided claims.
Laurenz Gerger, General Insurance Policy Adviser at the ABI, said: “Our latest motor premium tracker clearly shows that motorists have been benefiting from reduced road accident frequency during lockdown.” Alongside others, he urged insurers to pass on these savings to motorists, and several did. Admiral gave £25 refunds to all 4.4 million holders of insurance policies while LV granted up to £50 to customers who could prove the pandemic had financially impacted them.
Dan Hutson, Head of Motor Insurance at Compare the Market, said “The decreased cost of car insurance premiums will be welcome news for drivers, following years of rising costs… and could help families struggling financially as a result of the pandemic. Insurers should continue to support their customers wherever possible.”
How can I make additional savings?
Alongside car insurance premiums, and thanks to the financial strain of COVID-19, people are on the lookout for ways to make additional savings.
Cycling became incredibly popular during lockdown and, according to Global Data, 1.3 million Brits bought brand-new bikes in a bid to avoid public transport. The government was keen to encourage this shift as part of an ongoing programme to improve the nation’s health and offered people a £50 voucher to repair their two-wheeled drives and get back on the road.
Additionally, official figures show 33,000 hybrid or electric cars were registered between April and June, compared with 29,900 diesels, suggesting people are keen to buy more eco-friendly vehicles post-pandemic.
Alongside their green benefits, hybrid and electric cars are less powerful than their gas-guzzling counterparts, immediately reducing the cost of insurance. Some providers offer up to 5% off premiums and even make donations to environmental charities on your behalf.
Are you looking for fair and affordable finance deals?
At My Car Credit, we help you through every step of the car finance process to make the process as hassle-free as possible. We’re open seven days a week and our website has plenty of helpful tips, guidelines and answers to any questions you have.
Representative APR 10.9%
Evolution Funding Ltd T/A My Car Credit
Require more help?
Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!