CAR insurance prices have been slashed in the UK but thousands of drivers have been found to be overpaying for their premium by remaining loyal to one company at renewal and not shopping around.
Car insurance prices have been fluctuating recently after hitting record highs towards the end of last year, before dipping again in 2018.
Prices for average premiums are now sitting at £752 which is a massive £95 cheaper (11 per cent) compared to this time last year.
This is based on more than six million quotes a quarter from Confused.com and powered by Willis Towers Watson.
New research has found, however, that almost two thirds (62 per cent) of customers are not benefitting from savings.
The research found that drivers that remain loyal to the same insurer are not benefitting from savings.
According to the research, average premiums renewed with the same insurer between April and June 2018 went up by £49 on average.
Drivers staying loyal could, therefore, be missing out on saving and the study found that 58 per cent are sticking with the same insurer.
However, there is a top tip that could see drivers save drivers up to £613 on average.
The research shows that there is a ‘sweet spot’ 21 days prior to the renewal date which could see them make massive savings.
Drivers snapping up insurance on the day of renewal could end up paying twice as much (£1,264) on average.
A change to the Ogden Rate is believed to be one of the factors turbocharging a drop in insurance costs.
The UK Government dropped the rate to -0.75% in March 2017, meaning insurers had to pay more for personal injury claims, which drove drivers’ premiums upwards significantly.
In some degree, insurers seem to have recovered from the shock of this dramatic change and have been able to soften their prices.
However, the research suggests that insurance companies are anticipating the introduction of the Ogden rate and are therefore reducing their rates, which could cause price drops to plateau.
Louise O’Shea, CEO at Confused.com comments: “It is great to see the Government has recognised the steep drop in the Ogden Rate has over-inflated car insurance prices, and is now taking corrective action.
“And the clampdown on fraudulent whiplash claims announced earlier is also proving to be a positive for motorists. Insurers are reacting to these changes which means premiums have started to drop once again, making it more affordable for drivers. This is brilliant news!
“My experience tells me two things I am certain of. Firstly, car insurance prices are dropping, and that is excellent news for motorists. But they will start to increase once again, although exactly when this will be is hard to predict.
“Secondly, while prices are decreasing, drivers can still save money. Even if their renewal price is cheaper than the amount they paid the previous year, it is highly likely that there will be another insurer out there who will offer a better rate.
“And we are so certain of this at Confused.com that we are offering to beat drivers’ renewals, or give them the difference, plus £20.
“For both these reasons it is very important for drivers to shop around for car insurance as money can always be saved.