COVID-19 DRIVES DOWN CAR INSURANCE PRICES IN 2020

New research from Britain’s leading price comparison, MoneySuperMarket, reveals the impact of COVID-19 on car insurance premiums over the first half of 2020.

The cost of an average fully comprehensive car insurance premium in the UK is currently £475 – down 2% from £486 a year ago.

Despite car insurance premiums peaking towards the end of 2019 at £503, prices have continued on a downward trend in 2020, after road traffic levels dropped by 65% at the height of lockdown, according to figures from the AA. Prices have fallen by £28 between the end of 2019 the end of June 2020 – a fall of 6%.

Quarterly price rises from Q1 2019 to Q2 2020

	Q2 2019	Q3 2019	Q4 2019	Q1 2020	Q2 2020
Premium	£486	£472	£503	£485	£475
% difference	+1.2%	– 2.8%	+6.6%	-3.6%	– 2.0%

Looking at regional variations, drivers living in East London pay most for premiums (£986), almost double the UK average (£486), while London as a whole paid an average premium of £683.

Top ten most expensive locations for car insurance premiums

Position	Location	Q2 2020 cost
1	East London	£964
2	North West London	£880
3	Ilford and Barking	£875
4	Southall and Uxbridge	£832
5	North London	£813
6	City of London	£770
7	Bradford	£765
8	Harrow	£743
9	South East London	£723
10	Manchester	£722

The ten cheapest locations for car insurance premiums

Position	Location	Q2 2020 Cost
1	Isle of Lewis	£276
1	Kirkwall	£280
2	Llandrindod Wells	£281
3	Dorchester	£286
4	Shetland Islands	£286
5	Inverness	£289
6	Exeter	£290
7	Dumfries and Galloway	£292
8	Truro	£293
9	Torquay	£298
10	Taunton	£301

Drivers in the Shetland Islands experienced the biggest fall in premiums, paying an average of 14.6% (£49) less than 12 months ago. North West London drivers felt the biggest premium rises – cost were up by an average of 7.1% (£59) on last year².

Looking at age, premiums have fallen substantially by 25% in the past 12 months for drivers aged between 17 and 19, with fully comprehensive cover now costing an average of £777 a year – down from £1040 a year ago. In part, this could be due to a reduction in the number of brand-new drivers in this age group who may have been unable to take their test during the last quarter.

Drivers aged between 40 and 49, however, saw the average cost of a policy rise by 4% year-on-year to £420 – the largest amount paid by any age group. This compares to drivers aged 65 or over who pay an average of just £282 a year³.

Dave Merrick, car insurance spokesperson for MoneySuperMarket, commented: “Our research shows that it’s likely coronavirus is contributing to the fall in car insurance premiums.

“With fewer cars on the road, there have been fewer claims, exerting a downward pressure on prices. It’s a pressure that has far outweighed other factors – such as the UK’s departure from the EU – that some expected could have led to premium prices increasing.

“Quite how long this downward trend will continue is hard to say. As we emerge from lockdown, roads will become busier and claims will start to rise again – which may well lead to prices rising.

“Whatever happens to premiums in the coming months, if your policy is up for renewal, make sure you shop around for a better deal– doing so can save you up to £270⁴.”