Rates fall alongside new European car sales

CAR INSURANCE NEWS ROUNDUP: WEEK ENDED 24 APR 2013:

So it looks like car insurance rates have been on the decline in the UK, and the reason behind this may be because total car sales across Europe have dropped.

The AA says that, according to their latest motor car insurance premium index for 2013’s first quarter, the average price of comprehensive cover has continued its slow decline. The AA says that it’s around £746, give or take a few pennies, to get a year of comprehensive cover – 1.4 per cent less than it was last quarter. When taken year-on-year, prices have apparently gone down by just over 4 per cent.

Director of the AA’s car insurance division, Simon Douglas, was quick to point out that drivers weary of paying through the nose for comprehensive cover should welcome this change, especially in the face of massive rate increases over the past three years – not to mention the current price of petrol makin git it an expensive proposition to get anywhere nowadays! Mr Douglas said that new legal developments this year such as the Legal Aid Act will help to drive down premium prices as well.

However, there could be another force at work that’s behind the drop in pricing; according to the Association of European Carmakers, there were 10.3 per cent fewer car sales in March of this year than there were in the same month of 2012 across the entirety of Europe. This could mean that slackened demand for vehicles has left  car insurance companies feeling the squeeze, instead.

It’s been 18 months in a row that overall car sale figures have been dropping, the Association pointed out. However, the UK did happen to be the least worse off of the bunch – cold comfort indeed for someone with no choice but to take out an expensive insurance policy that can strain the wallet.

Is this part of why prices dropped in the UK? Maybe – or maybe it’s not necessarily related, considering how he UK car sale figures were the best in the UK – though not by much. Some classes of UK motorists, especially young drivers, can end up paying shedloads more than the average the AA published, so I would be initially more than a little suspicious of the figures brought forward from the motoring organisation – not because they’re deliberately misleading mind you, but because they simply don’t take into account the types of travails that younger motorists have to go through.

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