Insurance premiums obtained through price comparison sites see biggest fall in years.
An average decline of 5.1% during the third quarter (July to September) reported by the Car Insurance Price Index is the largest since 2007.
This figure contributes to a yearly reduction now at 10.3% over the last 12 months.
The average premium in the UK is currently at £757 compared to £844 last year, a total reduction of £87.
Third party, fire and theft cover has also decreased in 12 months, falling by £24 on average (2.1%).
Duncan Anderson of Towers Watson, one of the companies involved in compiling the report, said: “Despite this being the fifth successive quarter of flat or falling rates for comprehensive cover, I think the current scale of the annual and quarterly decreases will cause some pause for thought in the insurance industry.”
Younger drivers are one of the main groups that have benefitted from reductions; younger female drivers especially.
Between 17 and 20 year old drivers, rates have fallen by 13.6% in the last year on average, but counting females alone the figure is 17.3%.
“Price decreases of this order signify jostling for position amongst insurers ahead of the implementation of the European Court of Justice ban on the use of gender in pricing from 21 December,” added Mr Anderson.
“Having won more younger driver business, they will seek to retain profitable segments by substituting other factors for gender and minimising the impact of the future price rises that are reasonably anticipated to affect many women in 2013.”