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Cheapest Car insurance quotes have this in common

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Telematics car insurance is growing in popularity since their rates are among the most competitive, says a new report.

Telematic or “black box” insurers feel they can afford to provide cheaper deals since they can monitor a driver’s habits and adjust their premiums based on how safe they drive. With premiums at record lows, is now the time to switch and get an even better deal?

  • Telematics market growth is continuing, with the COVID-19 pandemic breathing new life into the sector   
  • The average motor premium in the UK is now £751
  • Under-25s are turning to telematic deals to cut down on premiums

Over a quarter (27%) of the five cheapest insurance quotes now come from telematics firms – the highest figure recorded by Consumer Intelligence since the insurance pricing expert started collecting data in October 2013.

“Take-up of telematics policies has always been higher with younger drivers in a bid to help them get on the road for less, says Harriet Devonald, Consumer Intelligence’s insurance pricing expert.

“But even this age group are now using the technology more – with 62% of the cheapest five quotes now telematics-based for the under-25s. This is an almost 10% increase since the start of the pandemic.”

What is telematics car insurance?

Telematics car insurance is when an insurer monitors a driver’s habits and adjusts their premiums based on how they drive.

The Consumer Intelligence Car Insurance Price Index – which follows the price movements in the car insurance market, reported that the average cost of car insurance is now 11.4% below pre-COVID levels, with premiums plunging 9.4% in the last 12 months alone.

The average motor premium in the UK is now £751. Last year, the pandemic cut traffic levels – resulting in a large reduction in motor accidents and claims. Yet, it appears that more recently price falls are beginning to stabilise as almost normal traffic data is being recorded once again – with premiums slipping just 0.9% in the last three months.

Can black box technology make mistakes?

The Financial Ombudsman Service (FOS), which regulates the UK insurance industry, admitted in 2018 that it had received complaints from “a number of people who believed the data their ‘black box’ had collected wasn’t right”.

“Those growing numbers may be linked to the increasing use of black-box policies, but a worrying number of readers have contacted Auto Express to complain that their telematics devices had gone wrong – sometimes significantly so, ” reported Auto Express.

“106mph” in a 30 limit?

One user of telematics insurance write into Auto Express to say that her black box provider E-mailed, claiming that she had spent an extended period driving at 106mph in a 30mph limit.

In addition to the excessive speed that Emily said she would “never dream” of reaching, the location of the alleged incident meant she would have had to travel 120 miles from her home in less than a minute. Her black box was also deemed a local road with a 60mph limit to be a 30mph zone.

Are car insurance premiums going up or down?

Average overall premiums have increased 13.3% since October 2013 when Consumer Intelligence first started collecting data.

Although prices have now fallen almost 20% from their September 2017 pricing peak as COVID-19 continues to push down car insurance prices.

How does my age impact my car insurance premium?

All age groups witnessed similar falls to their car insurance premiums over the last 12 months. 

The under-25s (-10.5%) led the way with the biggest yearly decrease, with motorists aged 25-49 (-9.6%) and the over-50s (-8.2%) following closely behind. 

Yet while premiums may have fallen the most for younger motorists, insurance costs remain high for the cohort – at £1,589 for a typical annual policy. This compares to £568 for a driver aged 25-49 and just £353 for the over-50s.

“Even with telematics policies working hard to keep pricing affordable, there is still a huge difference between our age groups,” says Devonald.

How does where I live impact my car insurance premium?

In the past 12 months, five UK regions recorded double-digit premium drops – the highest fallers being the North East (-13.2%), North West (-10.7%) and London (-10.4%). All UK regions posted significant falls over the 12-month period – the smallest riser being the South East (-7.3%).

When looking over a shorter period, for example, the last three months, again the price index report said that there have been premium decreases in all corners of the UK except for the Eastern region, which gained just 0.3%.

Which region is it cheapest to buy car insurance?

London drivers (£1,265) continue to be the most expensive to insure, with the North West (£984) following in second at a fair distance behind. The South West (£529) remains the cheapest UK region to buy car insurance.

Region            Price change seen over the last 12 months
(Aug 20 – Aug 21)
Price Index
(May 21 – August 21)
August 2021
Average Premium
(5 cheapest)
E Midlands-8.3%-1.1%£554
W Midlands-9.8%-0.5%£752
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