Car Insurance prices fall

Car insurance prices fall during first quarter of 2018

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Car insurance prices fell during the first quarter of 2018 following the arrival of new calculations for whiplash and compensation claims, in addition to general fluctuations owing to seasonal demand. This report comes from figures published by the Association of British Insurers.

UK motorists forked out £478 on average for car cover between January and March, which is £13 less than the final three months of 2017. However, while the drop appears to be good news in isolation, the figure is still higher than any first quarter of the year on record. This may suggest falling insurance costs will not be a trend for the remainder of the year.

The cost of car cover was actually £14 more than the January to March period in 2017. The price of motor trade insurance is always changing as it is subject to seasonal trends and other factors. For example, a Q1 fall is generally commonplace due to the influx of fresh car registrations in March. This uptick in demand leads to more competition in the insurance industry and thus, lower prices.

However, the first quarter of this year has also seen changes in the method in which injury compensation is calculated, while a new civil liability bill introduced in March is also likely to have had an impact on the notable fall on the previous three months. ABI measures prices for its insurance data rather than using quotes and it claims the latest drop is in line with expectations.

ABI Assistant Director and Head of Motor and Liability Rob Cummings said: “While this small fall in the last few months gives some relief to motorists, it is in line with seasonal trends and the underlying cost pressures from things like personal injury claims remain.”

He added: “The Civil Liability Bill now going through parliament will fix a broken system and help millions of motorists whose premiums had been going up and up over the last two years.”

In other motor trade news, it was reported earlier this week that manufacturers are struggling to sell diesel vehicles due to eco-friendly initiatives and a lack of consumer interest. However, The Republic of Ireland is taking advantage of the weakening pound to bring these “smoky, old” cars over to the country.

Alan Nolan, Society of the Irish Motor Industry’s Director General said: “If you look at the imports, they have gone from 48,000 in 2015 to maybe 110,000 this year so used car imports will be very close to the new car market. But it is not new and nearly new cars that are competing in the Irish car market, these are your diesels which are subsidised by very low sterling coming into the marketplace. The impact that this has is to drive down trade in prices for customers. And that is going to continue.”

Figures from show that six out of ten cars imported to Ireland are four or more years old and more three-quarters of these are diesel vehicles.

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