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Car premiums remain static in last quarter of 2005

11 January 2006 / by None
Premiums for insurance on cars has remained relatively static over the last quarter of 2005, new research from AA Insurance shows.

Results from the AA British Insurance Premium Index revealed that little was achieved price wise in the last three months of 2005 with car insurance premiums falling by £3.18 to an average quoted price of £762.28.

However although static prices may help the consumers wallets now, Kevin Sinclair, managing director of AA Insurance fears the repercussions later down the line.

"Although this might seem to be good news for customers, I'm still concerned that if car insurance premiums remain static we might see a sudden upswing later this year. Insurers will find it increasingly difficult to cover their rising claims costs, particularly for personal injury claims," he said.

Mr Sinclair explained that over the year, the shoparound price (the average of the lowest quotes in the index) increased by nearly nine pounds much more than the average quoted premium.

"This suggests that the lowest priced insurers are beginning to feel the pressure of claims inflation," he said.

Younger drivers also saw increases to premiums over 2005 with TPFT insurance rising to its highest average quoted premium of £940.50.

Third party insurance is mostly purchased by younger drivers.

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