The average quoted premium for a car insurance policy has fallen by 15% to £579 from £678 a year ago, and are now a third below their peak of 2011, according to comparision site Confused.com.
The biggest winners are 17-20 year old females who have enjoyed a 33% year-on-year fall in premiums, despite the introduction of the EU gender directive, which came into force at the start of last year and stopped insurers discriminating between men and women.
When the EU rules were introduced, some commentators predicted that women would lose out – but both sexes have seen price falls. "Both men and women in general have experienced year-on-year car insurance price drops of 13% and 17% respectively," Confused.com said.
Manchester and Merseyside, traditionally areas with very high car insurance premiums, are now experiencing some of the biggest falls. Prices in the region were down 19%, falling by £184 to stand at £808 on average. However, they still remain the highest in the UK outside inner London.
The figures chime with separate research by the AA, which said that premiums are down £105 over the past year. "Competitive pressure is keeping premiums down, rather than reforms designed to curb whiplash injury claims which have had little effect on the number of fraudulent injury claims made."
But James Rakow, insurance partner at Deloitte, is predicting that premiums are likely to start rising over the next 12 months. "The trend is likely to reverse as insurers made modest underwriting profits last year. They paid out £99 in claims and expenses for every £100 of premiums in 2013," he said.
"After nearly two years of falling prices, I expect car insurance premiums to start rising in line with inflation over the next 12 months. The UK personal motor insurance industry returned to underwriting profitability in 2013 and reported some of the best figures since 2004. However, these figures were supported by the fact that insurers felt able to release claims reserves held at the previous year-end and this trend cannot go on indefinitely."
• This article has been amended to clarify that commentators had predicted that women would lose out under the EU gender directive, not men.
