The cost of insurance for drivers aged 17-21 years have fallen by 5.6 per cent during the last quarter, the British Insurance Premium Index of AA revealed, bringing the average annual premium down to £2,294.
High premiums have forced young British drivers off road for a long time and they have been the biggest losers in the insurance market, said director of AA Insurance Simon Douglas.
“Premiums have been rising at a disproportionate rate, but it seems at last that insurers are starting to compete a bit more for their business with rates starting to come down,” said Mr. Douglas.
Due to higher risks and rate of accidents, premiums for young drivers have always been higher. Newly qualified drivers are more likely to be involved in a traffic accident within two years of passing their test while one in a five new driver has a crash within six months after passing, according to charity Brake.
The young male adults pose the biggest threat, the charity research found with 74 percent of deaths of young adults are on roads. Alarmingly, more 16-19 years died as passengers than those died as drivers in 2009.
With the gender based premiums set to end in December 2012, young women under 25 years, who typically pay 40 per cent less premium than their male peers, can expect to witness their protection costs going up sharply, said Mr. Douglas.
The premium for the overall market is leveling off, and the average car insurance premium has stabilised at £923.90, a rise of 3.6 per cent over the last quarter, the lowest in 18 months.
“This is the smallest increase we have seen for some time, and I believe that over the rest of this year we will at last see premiums level off, despite the gloomier predictions of other market commentators,” said Mr. Douglas.
Overall premiums however, have jumped by 30.1 per cent since last year.