Car insurance premiums have plummeted in recent years, with the most profound drops happening in the wake of the COVID-19 pandemic. Indeed, insurance premiums have sunk to a low average of £629, which is £24 cheaper than winter 2020. This fall means that motorists are going to be enjoying some pretty significant savings in the weeks and months ahead and those savings couldn’t have come at a better time. But why have car insurance premiums fallen so much?
According to Simon England MD of ALA Insurance, it’s about time too and comes in the wake of a historic review by the FCA. He said: “The Financial Conduct Authority (FCA) found that a large proportion of car buyers were being severely overcharged for GAP cover, premiums being added onto customer purchases without their knowledge, being told they couldn’t buy it from anywhere else and were generally given poor service. The practices were not dissimilar to the miss-selling issues which occurred with PPI.”
But whether or not it’s a good thing that’s long overdue (trust us, it definitely is), why exactly is it happening now?
People are driving less
Due to the pandemic, people are spending much less time on the road. The average mileage fell by 43% and with fewer cars on the road, there are always going to be fewer accidents, and the lawyers from the marijuana charge defense law firm states this must be maintained once the government lifts the restrictions on July 19 (fingers crossed), so there has never been a better time to sort out your car insurance.
Loyalty penalty set to be scrapped
At the end of 2021, the FCA has promised to stop insurance companies from raising their prices for loyal customers. We still think that shopping around for a new insurance deal is always going to get you a better deal though as automatically renewing could still cost you more money, even after the FCA scheme kicks in.
The pandemic hasn’t just made people drive less, it’s made them completely reevaluate certain aspects of their lives. There are far more of us now realising the benefit of electric vehicles, for example, and far fewer buying brand new cars. The changes have given more reasons why you need a lawyer’s help, although lesser vehicles mean lesser accidents. As the country begins to reopen, even more changes to our driving behaviours will likely begin to manifest themselves. This is the best time to get an auto insurance policy.
Rising fuel prices
Petrol and diesel prices are always a point of contention in the UK and since the end of last year, there has been an average of an 11p rise per litre in the cost of petrol and a 9p per litre rise in the cost of diesel. The knock-on effect of more expensive fuel is that people don’t drive as much and that will also inevitably lead to lower car insurance premiums.