The cost of insuring a car has fallen since the start of the year, according to new research by the AA .

A study by the motoring group found that the average yearly cost of a comprehensive car insurance policy dropped by 3.2 per cent to £968.26 during the first three months of 2010.

However, the AA said the figure is still 13.4 per cent higher than the average car insurance premium recorded in the first quarter of 2009.

Simon Douglas, director of AA insurance, said: Last year, for the first time, premiums rose during the first quarter and I expected the same to happen this year.

He explained that breaks in insurance price inflation tend to occur between January and March as these are the months when most drivers look to renew their policies, leading to increased competition between insurance providers .

But he added that car insurance premiums could soon start rising once again due to rising overhead costs for insurers .

Sainsbury's Finance recently revealed that the average overall cost of running a car for a year has risen by 20 per cent over the past three years to £2,539.