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The average cost of comprehensive motor insurance is now £1,452 - a year ago it was £1,496.98, 3% ...

Smallest rise in motor insurance premiums for years

By Charlotte Beugge 25.04.12

Premiums are up 7.7% over the year - but it's the lowest annual increase recorded for four years.

The average cost of comprehensive motor insurance is now £1,452 - a year ago it was £1,496.98, 3% less than now.

According to the AA British Insurance Premium Index, the typical third party fire and theft premium is £1,959.03 now, compared with £1,953.98 a year ago. Over the three months to April, the comprehensive premium was unchanged, but the typical third party fire and theft policy was up 1.3%.

For policyholders who bother to shop around for the best deals, the average comprehensive premium was £1,132.24, 7% higher than the April 2011 figure of £1,051.18.

However it was 1.1% lower than in January 2012. The average shop-around premium for third party fire and theft was £1,642.40, 2% lower than the April 2011 figure of £1,676.13.

For young drivers, men aged 17 to 22 also saw their premiums fall by almost 1% over the quarter although those for young women increased by 4.8%.

But premiums are still very high - for a man aged 17 to 22 the typical premium was £4,170.63, up 3.8% from January's figure. For a woman aged 17 to 22 the typical premium was £3,478.63, up 2.8% from January's figure.

Simon Douglas, director of AA Insurance, said that any drop in premiums will not be sustainable: "My fear is that if prices do continue to drop, we'll see a repeat of 2009, when industry losses led to premiums suddenly rocketing up following a long period of little movement."