Insurance costs fall after crackdown on fraud

Efforts from the police and DVLA to crack down on the number of fraudulent whiplash claims has seen the cost of insurance fall.

On average, the amount paid by drivers for motor insurance last year was £360.75, a four per cent drop compared to the average cost in 2013 according to the Association of British Insurers (ABI).

Despite this, premiums rose in the final three months of last year, with average prices during the October to December period in 2014 clocking in at £372, around £12 more than the overall average.

Highly competitive

James Dalton, the ABI’s director of general insurance policy, said: “The motor insurance market remains highly competitive, with insurers delivering on their commitment to pass on savings to customers following the introduction of reforms to the civil justice system.”

“In 2014 we have seen an increase in low-value claims starting to feed through into pricing,” he added.

“This is not surprising as rising economic confidence, high employment levels and falling oil prices have seen more cars on the road and greater use of cars for work and business use which increases accident volumes.”

Young drivers still paying too much?

However, while insurance costs for drivers as a whole have fallen, there are still concerns that the price of insurance premiums for young motorists are still at an unacceptable high.

Last month, it was revealed that the overall average cost of getting on the road for a young or first-time driver has risen in the past five years to nearly £7,000.

This figure accounts for the cost of lessons, insurance and a first car, though recent data shows that the average cost of a year’s insurance for a 17-year old driver comes in at a whopping £2,232.

Reports have also shown that as premiums are on the rise in the past few months, leading forecasters to predict that insurance costs could continue to increase throughout the year.

First car

New drivers and their parents are also now reportedly spending an average of £3,825 on their first car, up from an average of just £2,477 six years ago.

Luckily, however, the cost of fuel has recently tumbled across the country as crude oil prices fall, meaning that for the first time in years motorists will have a little extra money to spend.

If you’re a first-time driver in the market for your first car, why not take a look at the range of new and used cars available from Perrys dealerships now?

As well as offering a range of great cars for even the tightest budget, Perrys is also offering zero per cent finance on select vehicles for a limited time only. Why not get in touch to see what we can offer you?