Is Young Drivers’ Insurance Becoming More Affordable?
Is Young Drivers’ Insurance Becoming More Affordable?
It’s always been generally accepted that young people’s car insurance costs are the highest on the market. This is due to the fact that the drivers are typically less experienced, and often have more brash attitudes (although that isn’t guaranteed), both facts meaning that their likelihood of having an accident is higher. However, statistics indicate that the cost of insurance for younger drivers is currently reducing.
This piece from http://www.jenningsmotorgroup.co.uk examines the situation further.
According to data from comparison site Confused.com, the cost of car cover for those aged between 17 and 20 has dropped substantially by between 12% and 23% depending on the driver’s individual circumstances. For men, the fall was a massive 23.6%, leading to savings of around £698 compared to prices last year. The fall for women was less, but still reached a drop of 12.3%, a decrease of around £244.
Why are the decreases taking place?
A number of factors are believed to have had an impact on the cost. Gemma Stanbury – Confused’s own head of car insurance – noted that the recent rolling out of the EU’s Gender Directive would probably have had a major impact. The directive, which came into effect in December 2012, prohibited insurers from using gender to set the prices for car insurance. As a result, the fact that men statistically had more accidents was no longer citable when working out policy costs.
Another key factor is believed to be the government’s less tolerant stance on the fraudulent claims that had been pushing insurance premiums higher and higher.
With insurance companies a bit more confident that fraudulent claims are being reduced, policy costs have come down.
Is this trend just occurring among young people?
Statistics indicate that the fall in the cost of car cover has taken place across the market, rather than just amongst the young. The Mirror recently reported that car insurance firms engaged in a price war had seen cover decrease overall by a record 14.1% average across the UK.
The report, which looked at data from the AA, showed that the average cost of a year’s cover had been reduced from £621 in 2012 to £533 today. The decrease in cost during the last quarter alone was measured as being 4.6%.
The biggest regional drop was in the North West, where the cost of cover fell by 6.3%, though it still remains the most expensive area in which to insure a car overall.
There was also a fall in costs for older drivers of 4.1%, with a year’s cover now costing around £302.
Will it continue?
Not necessarily. Simon Douglas, the director of AA Insurance, noted that he thought it likely the tumbling rates would probably cease later this year.
“It’s as if premiums are on a helter-skelter slide,” he said. “I fear that the downward spiral will end with a bump. My biggest fear is that if the falls are too great, premiums will bounce sharply up again later in the year.”
As of now however, rates are continuing to decrease, and those seeking to save themselves money would be wise to look at obtaining next year’s cover as soon as possible.
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