The cost of car insurance is slowly coming back down to earth after reaching record levels last year, according to a closely watched index.
The latest Consumer Intelligence report showed annual price rises for car insurance rose 9.8 per cent over the 12 months to the end of August. This was down on the 34 per cent average price rise reported in the year ending May.
Quarterly data also revealed a drop in the cost of cover in many areas, including the South West, East and West Midlands and Yorkshire and the Humber.
The most common quotes for drivers ranged between £500 and £749 in August this year, data shows.
Consumer Intelligence said that over-50s and drivers in Wales were benefiting the most from the slowdown, with average quoted premiums rising by only 2.6 per cent and just 0.8 per cent in Wales.
By contrast, Londoners continued to face high prices, with average quoted premiums up 15.6 per cent in the year to August. Cost for cover in the UK capital is higher than most other areas due to higher claim rates, vehicle crime and higher costs at garages.
Analysis by Confused.com in January showed Londoners were paying a record £1607 on average to cover their cars.
The UK’s biggest car insurance firms have been grappling with soaring inflation and high energy prices, which have influenced the cost of vehicle repair. The Association of British Insurers (ABI) previously flagged a 300 per cent rise in energy costs at British garages.
But recent half-year results have signalled prices are beginning to come down. Admiral reported a 43 per cent jump in turnover in August and said it had been able to offer more “competitive” pricing to attract customers.
“While many insurers reported an easing of claims inflation as part of their half year results, claims
costs remain a weight on profitability. More insurers are fighting for the perceived safer risks, with
this competition driving down prices for the over 50s,” Max Thompson, insurance insight
manager at Consumer Intelligence, said.
“This attitude to risk carries through to regional trends, too, with London seeing increases in quoted
premiums of 4.4 per cent in the last three months,