Car insurance rates drop again – possibly for the last time?

CAR INSURANCE NEWS ROUNDUP: 7 DAYS ENDING 22 JAN 2014:

Well I have good news for you and bad news: this week it came out that car insurance rates dropped yet again, but this might be the end of such occurrences.

The latest insurance price index from a major car insurance comparison site announced this week that comprehensive cover dropped in price by an average of 12.5 per cent for the last quarter of 2013. That brings average costs for comprehensive cover to around £644. Younger drivers and those living in areas with high accident rates are obviously not going to be charged such discount car insurance rates, but on average that’s not bad when it comes down to it – and as a result most motorists are feeling quite celebratory about the improvements.

However, the good news comes screeching to a halt after you take a closer look at it. In fact, another news report revealed that the price war between insurers is finally reaching its rock bottom – and that means the massive price drops we’ve been experiencing over the past year are likely to be a thing of the past.

Investment experts have been quick to point out that car insurance companies are more than just blowing smoke when it comes to the slowdown in competitive rate cutting, as late last week saw the general share prices for many British based insurers increased from anywhere between 2.3 per cent and 5.6 per cent. That’s definitely significant in the realm of stock prices.

So yes, it’s certainly a mixed bag of news this week. Now I don’t think that we’re going to see the absolute end of insurance rate drops, but without the pressure to compete amongst one another for customers I don’t really see how there’s going to be any appreciable gains for motorists looking for the best car insurance deals they can find. This is bound to be very frustrating for drivers already labouring under rates that are on the high side, but the future is certainly not written in stone and anything can definitely happen.

Still, I wouldn’t hold my breath and expect to see some fantastic rate drops that we’ve seen over the last 12 months or so. My prediction? Things will largely stay the same unless there’s some shake up in the industry – so keep your fingers crossed and hope for the best!

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