Car insurance prices tumble – but it pays to shop around

• Scottish drivers are experiencing some of the biggest price drops since 2014, when the cost of insurance fell by 17% in the Scottish Borders
• Drivers in Central Scotland are seeing biggest monetary savings year-on-year, as prices drop by £80 (15%), taking the average premium to £456.
• The overall cost of insurance in Scotland has fallen by £72 (15%) year-on-year – with the average premium standing at £416.
• Motorists in the UK can now expect to pay £538 for their car insurance, on average, after an £87 (14%) fall in prices year-on-year.
• Shopping around proven to save drivers money, as further research of UK drivers finds almost half (45%) of those who received their renewal in the past quarter (Q1 2021) saw their price increase by £45, on average (1).

Drivers in Scotland are seeing some of the biggest drops in car insurance costs in almost seven years, new data reveals.

The average cost of car insurance in the Scottish Highlands and Islands dropped by £72 (16%), the highest percentage decrease in 12 months, meaning drivers in the region can now expect to pay £374, on average.

The last time car insurance prices in Scotland fell by this much was in 2014, when drivers in the Scottish Borders saw car insurance premiums drop by 17%, on average.

That’s according to the latest car insurance price index by Confused.com (Q1 2021), 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.

According to the data, motorists in all Scottish regions have seen a drop in their car insurance costs when shopping around.

In particular, Central Scotland saw big year-on-year price drops, as the average premium fell by £80 (15%), to £456.

Meanwhile, those in the East and North-East of Scotland have seen a saving of £60 (13%), making the average premium stand at £387. And drivers in the Scottish Borders can save up to £62 (15%), as the average cost for car insurance has dropped to £352.

Overall, the average cost of car insurance in Scotland dropped by £72 (15%) in 12 months, following a turbulent year which has sparked significant changes in driving habits. This means the average cost of car insurance in Scotland as a whole is now £416 on average.

Throughout this past year, prices have been steadily declining, as drivers spend less time on the road. As a result, prices in Scotland have decreased by £23 (6%) in the last three months alone (Q4 2020- Q1 2021), as insurers adapt their pricing to reflect the current level of risk on the roads.

Looking at the rest of the UK, similar savings are being seen, as motorists can now expect to pay £538 for their car insurance, after a price drop of £87 (14%) in the last 12 months, on average.

However, Louise O’Shea, CEO at Confused.com, explains that not all drivers will see these savings. While those shopping around and buying a new car insurance policy will have saved as much as £87, further research of UK drivers found that almost half (45%) of drivers who received their renewal in the past three months saw their price increase by £45, on average. This suggests they could be paying more by opting to renew with their current insurer.

In fact, of the drivers who saw their renewal price increase this past quarter, almost half chose to stay with their current insurer, despite their price being more expensive.

Of those who did stay with their insurer, one in 10 (11%) claim their insurer automatically renewed the policy on their behalf. And it’s this practice which makes it difficult for motorists to opt out of their policy and find a better deal.

This is something that is being investigated by the Financial Conduct Authority (FCA), which is looking into changes that will make it easier for customers to cancel their policy and benefit from the price savings being reported for new policies.

The FCA’s proposal won’t just make it easier to cancel auto-renewals, it is also set to prohibit insurers from calculating a price based on whether someone is a new customer or a renewing their policy.

However, this does not mean that renewal prices will stay the same or decrease, as they could still increase year-on-year. The FCA has been clear that shopping around will still give customers opportunities to save.

While all drivers in Scotland have been able to benefit from savings on their car insurance policy, some regions have seen greater savings than others.

In Central Scotland, it’s drivers in Glasgow that have experienced the greatest price cuts, with the average premium standing at £502 after an annual drop of £93 (16%). However, motorists in Kilmarnock are making the greatest quarterly savings, as prices drop by £29 (7%). Drivers in this region are also paying out the least for their insurance, as the average premium costs £396.

Motorists in Dumfries in the Scottish Borders are also seeing great savings, as the average premium has fallen to £351 after a price drop of £67 (16%) compared to 12 months ago. Prices have also gone down by £26 (7%) in the last three months, as drivers in the area benefit from the cheapest insurance prices in the region.

Meanwhile, drivers in Kirkcaldy in the East and North East can expect to save £65 (15%) year-on-year. They are also seeing the biggest quarterly savings, after prices have fallen by £28 (7%), taking the average premium to £377 – the lowest premium in the region.

In the Highlands and Islands, drivers in Paisley have seen the biggest annual savings, as prices fall by £86 (17%). Yet, it’s motorists in Shetland that have experienced the greatest quarterly savings, as the cost of insurance drops by £44 (11%), taking the average premium to £358. However, Kirkwall motorists are paying out the least for their insurance, with the average premium standing at £317.

The price drops are good news for both genders also. Females in the Scottish Borders are paying the least for their insurance, following a £59 (15%) drop in prices year-on year and a reduction of £19 (5%) in the last quarter – taking the average premium to £334.

Males in the Scottish Borders are also paying the least for their insurance, as prices dropped by £63 (15%) in the last 12 months and by £25 (6%) in the last three months, with the average premium ringing in at £363.

Meanwhile, both male and female motorists are making the greatest savings in the Scottish Highlands and Islands. Year-on-year, females have saved £67 (16%), and males have seen savings of £74 (16%), on average. The biggest quarterly savings can be found in this region also, as females can see price drops of £27 (7%), while males can see price cuts of £29 (7%), with average premiums standing at £348 and £390, respectively.

And, in a similar trend to the last quarter, all age groups across all Scottish regions are making savings on their car insurance both year-on-year and quarterly.

However, while it was younger drivers that were able to see big savings three months ago, now it’s older drivers who are faring the best.

Those aged over 71 can expect to make big savings, as males in the Highlands and Islands are seeing cuts of £77 (19%) year-on year, taking the average premium to £322, while females in the region can save £67 (18%), with average insurance premiums standing at £293.

In Central Scotland, females over the age of 71 are set to save £68 (17%) since 12 months ago, while males in the area can make savings of £74 (17%). Prices for this age group have also fallen in the East and North East, with males saving £65 (16%) and females saving £44 (13%), on average. Drivers aged over 71 who live in the Scottish Borders are seeing reductions of 17%, with females saving £60 and males £66 year-on-year.

But the youngest category of drivers is also benefitting from price cuts, as those aged 17-20 saved 11% in the Highlands and Islands, with prices dropping by £142 for males and £109 for females in the last 12 months.

In Central Scotland, females aged 17-20 can look to save £108 (9%), with males set to save £99 (7%). Equally, in the East and North East of Scotland, females in this age range can save up to £95 (10%), while male drivers are making savings of £142 (10%) in the last 12 months.

However, while the price of car insurance is decreasing, some motoring costs are in fact starting to creep up as the UK eases out of lockdown. In fact, Confused.com’s fuel price index suggests that petrol and diesel prices have been on the up since the end of last year.

According to the data, drivers can now expect to pay 124p for petrol, on average. This is 11p more than December 2020. Meanwhile, diesel prices have increased from 118p to 127p in the same period. With these costs increasing, drivers will no doubt be looking to make savings where they can, starting with their car insurance.

Louise O’Shea CEO at Confused.com, says: “It’s been just over a year since we went into lockdown for the first time and this triggered a lot of changes in how we’re using our cars. And this is a change that could be here to stay for the foreseeable future, so it only seems right that our car insurance costs are cheaper to reflect this.

“What we are seeing is the biggest drop in prices in Scotland in almost seven years. But it’s important to remember that these lower prices are only benefiting those who shop around. It’s clear from our research that automatically renewing could in fact cost you more money.

“Loyalty clearly doesn’t pay! But if the increase is small, or you are fortunate to see your renewal price drop, 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 your renewal quote or give you the difference, plus £20”