Cost of car insurance in Scotland falls by £65 in the steepest annual price drop in two years

Scottish drivers can now expect to pay £610 for their car insurance, as prices for new policies drop by 10% in 12 months, according to Confused.com’s car insurance price index 

• Drivers in Central Scotland benefited from biggest savings, as car insurance drops by £72 (10%) in the region  last 12 months
• But despite significant savings, Central Scotland is still most expensive region in Scotland, with average premium costing drivers £643
• Motorists in the UK can now expect to pay £52 (6%) less for their car insurance when buying a new policy, on average – a welcome saving as the coronavirus crisis extends into 2021
• However, further research by Confused.com found that two in five (42%) UK drivers who received their renewal in the past quarter saw their price increase by £49, on average

There’s good news for drivers in Scotland, as the average cost of car insurance has dropped by £65 over 12 months, in the steepest price drop seen in two years.

Scottish drivers can now expect to pay £610 for their car insurance, on average, as prices for new policies drop by 10% in the last 12 months. That’s according to the latest car insurance price index by Confused.com (Q4 2020), powered by Willis Towers Watson. Based on more than six million quotes per quarter, it’s the most comprehensive new business price index in the UK.

But motorists in some Scottish regions are seeing even greater savings. Drivers in Central Scotland have seen their car insurance premiums decrease by £72 (10%), on average, in the last 12 months. This brings the average car insurance cost in the region to £643, making it the most expensive of the four Scottish regions.

It’s a similar picture across the other Scottish regions, with all areas seeing steep decreases year-on-year. Motorists in East and North East Scotland have seen their car insurance prices fall by £66 (11%), taking the average premium in the region to £560, on average.

Meanwhile drivers in the Highlands and Islands can expect to make savings of £51 (8%) year-on-year, with the average car insurance cost standing at £601. Motorists in the Scottish Borders have seen prices drop by £46 (8%), with the average premium ringing in at £569.

These savings are reflected across the rest of the UK, with the overall cost of insurance falling by £52 (6%) on average – the biggest drop in two years. This brings the average price of car insurance to £763 – the cheapest price since early 2019. These decreases will no doubt be welcomed by drivers across the UK, as the coronavirus pandemic has forced a lot of financial uncertainty on many households.

However, further research by Confused.com suggests that motorists who choose to renew with the same insurer may not see the same savings. In a survey of 2,000 UK drivers, more than two fifths (42%) of those who were due to renew over the past quarter (Q4 2020) said their renewal price was more expensive than the previous year, with insurers adding an extra £49 to their price, on average. Worryingly, nearly a quarter (24%) chose to stay with the same insurer, despite their price being more expensive. But two in five (40%) shopped around and saved £60, on average.

Louise O’Shea, CEO at Confused.com, explains that this proves that it doesn’t pay to stay loyal. And new rules set out by the Financial Conduct Authority will make it even easier for consumers to cancel their existing policies and switch to a better deal(2).

Currently, customers who don’t actively seek out a new price will be automatically renewed on their existing policy, at the price which is set out by the insurer. And it’s clear from Confused.com’s research that many motorists are seeing their price increase year-on-year, meaning they’ll be paying out more money when there is likely to be a better price for them on the market. But the FCA’s proposal will not just make it easier to cancel auto-renewals, it is also set to prohibit insurers from calculating a price based on whether the customer is a new customer or a renewing customer. However, this does not mean that renewal prices will stay the same or decrease, they could still increase year-on-year.  The FCA have been clear that shopping around will still give customers opportunities to save.

As the country has lived in lockdown for the majority of the past 12 months, people are driving significantly less and the data suggests prices may have dropped to reflect this. According to further research by Confused.com, UK motorists expect to be driving 2,000 fewer miles this year, compared with last year, which can have a significant impact on the price they pay for their insurance.

Typically, having a lower mileage could mean drivers pay more for their insurance. For example, a driver with an annual mileage of between 3,000 and 4,000 miles per year would pay £126 more than if they were to drive between 8,000 and 9,000 miles.

This because a motorist who drivers fewer miles could be deemed to be less experienced and therefore a higher risk. However, in the current climate, two in three (61%) UK drivers claim they have been using their car less since being in lockdown, meaning the risk on roads has decreased overall.

While all drivers in Scotland have saved money on their car insurance in the last 12 months, some have benefitted from greater price decreases. In particular, drivers in Glasgow, Central Scotland, have seen car insurance prices fall by £104 (13%), on average, since the last quarter of 2019 with the average premium now costing £688. This is the biggest price drop in the region. Meanwhile, in the East and North East of Scotland, it’s motorists from Aberdeen that have seen the biggest savings. Drivers here can expect to save £79 (12%) year-on-year, paying out £567 for their car insurance, on average.

The price drops are boding well for both genders also. Male motorists in Central Scotland are making the biggest savings, as they can expect to save £74 (10%) on their car insurance compared to this time last year, taking the average premium to £667.

Similarly, male drivers in the East and North East of Scotland are also seeing a big different in prices, as they can expect to pay £70 (11%) less for their insurance compared with 12 months ago . The average premium for male motorists in the region stands at £581, on average. It’s a similar story in the Highlands and Islands and Scottish Borders, where male motorists can make savings of £53 (8%) and £48 (8%), respectively, on average.

Meanwhile, female drivers across the regions are also face similar decreases. Motorists in Central Scotland are able to save £70 (10%) on the car insurance premium since 12 months ago, with the average car insurance premium standing at £613  Female drivers in the East and North East of Scotland have seen car insurance premiums fall by £62 (11%) on average, since the same time last year, taking the average premium to £531. While, female motorists in the Highlands and Scottish borders are able to save £47 (8%) and £44 (7%) respectively, on average.

Perhaps somewhat surprisingly, even younger drivers are making savings in all four Scottish regions. Male drivers aged 17-20 are making the biggest savings, as prices have dropped by £125 (6%) in the East and North East Scotland, as well as in Central Scotland, on average. The average premiums cost £1,823 and £2,038, respectively, on average.

Female motorists aged 17-20 are also paying less for car insurance. Those in the East and North East are benefitting from the biggest savings, with car insurance prices having dropped by £90 (7%) since 12 months ago, taking the average premium to £1,288. While, in Central Scotland, female drivers in this age group are seeing savings of £88 (6%), with the average car insurance premium costing £1,480.

While the cost of car insurance is cheaper now for most drivers, it’s clear not everyone is off the hook, which proves the importance of shopping around to find the best deal.

Louise O’Shea, CEO at Confused.com comments: “We’re seeing some of the biggest car insurance savings across Scotland in a long time and it couldn’t come at a better time.

“It’s been nearly 12 months since we first went into lockdown and this put so many people in a difficult situation, so I have no doubt this news will be welcomed by so many. We’re at home and driving a lot less, it’s only right our car insurance prices should reflect that.

“That said, it’s important to remember that these savings are only being seen by those shopping around. We know from our research that insurers are still putting up renewal prices.

“Even if the increase is small, please don’t settle for this as there will be an insurer out there willing to offer a better price. At Confused.com we’re so certain of this that we’re offering to beat their renewal quote or give them the difference, plus £20⁽⁴⁾.”