25th June 2015
Over the past year the cheapest car insurance premiums for motorists aged under 25 have dropped dramatically, according to Consumer Intelligence.
The insurance market expert’s analysis revealed that between May 2014 and May 2015, premium costs for motorists aged under 25 fell by 10.3%.
But the dramatic fall came despite cheapest premiums across all drivers edging up 0.3% in the year. The Consumer Intelligence Motor Insurance Index, suggested that the price cuts for younger motorists are accelerating as since December 2014 the cheapest premiums for those aged under 25 is down 8.4%, while for all motorists premiums are down 1.1%.
However older motorists are paying the price for premium reductions for others. Those aged 50 and over have seen them increase by on average 5.2% since last May and in the year to date they are up 3.9% on average.
The trend for cutting premiums for younger motorists and increasing them for older ones has been running for some time. Consumer Intelligence data revealed that between October 2013 and May 2015, cheapest car insurance premiums fell by 23.7% for motorists aged under 25, and by 2.9% for all motorists. However, for those aged 50 and over they increased by 7.9%.
But despite the cuts younger motorists can still expect to pay more for their car insurance. The average cheapest premium for all motorists in May 2015 was £677, but for motorists aged under 25 this rises to £1,628. Motorists aged 25-49 and 50 and over can expect to pay around £457 and £247 respectively.
Ian Hughes, chief executive of Consumer Intelligence said: “The advent of Black-box policies for younger drivers is pushing down premiums, under 25 year olds saw massive increases at the turn of the decade so these reductions should help to put more of them back on the road. However, to some degree, this seems to be at the expense of older motorists.”