Car insurance 9.5% cheaper

Car insurance is 9.5 per cent cheaper than it was three months ago according to figures released today.

Insurancewide.com reveals comprehensive and third party insurance premiums have now dropped to an average of £626 over the last three months.

This compares with £693 for the previous quarter.

"The continuing fall (since quarter two) in average premiums in quarter three reflects the rates of almost every insurer and broker in the UK, including direct insurers such as Swiftcover.com. We don't, however, expect the rates to fall much further," commented James Harrison, chief executive of Insurancewide.

"Once again, the falling premiums shown by our research reflect the competitive pressure insurers are under to retain and attract ever-savvier customers," he added.

The news insurances premiums are falling contrasts with data released by Deloitte earlier this week finding the average third party premium was up ten per cent in the last year.

Deloitte's quarterly report finds third party cover reached £519 in August 2007, compared with £473 for August 2006

Fully comprehensive car insurance was up four per cent over the same period, rising from £441 to £458 on average.

"The key reason for the increase is insurers seeking to improve profitability. In the past several years, the underlying motor insurance market performance has been deteriorating with insurers’ results being buoyed by releases from their reserves," explained Catherine Barton, insurance partner at Deloitte.

"This situation is not sustainable in the long-term and, combined with the impact of major events such as the 2007 floods, rates were going to have to go up. We believe premiums will continue to rise for a few months yet."

She added: "In spite of increasing premiums in the market generally, customers who shop around can still find a good deal - and not necessarily through a price aggregator. Those who don’t shop around are likely to have seen bigger increases."

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