Motorists driving fewer miles, a drop in road accidents and fewer cars on the road during the Covid-19 pandemic triggered the biggest drop in auto insurance prices in more than six years.
British motorists are now paying some of the cheapest prices for their car insurance since 2016, and new research suggests the Covid-19 pandemic could be the reason for these significant savings.
A new report from Confus.com found that the number of accidents on our roads has dropped significantly, as motorists claim to drive fewer kilometers than before the pandemic began.
This, among many other reasons, contributes to a significant reduction in the amount that drivers currently pay for their auto insurance.
In early 2021, Confused.com’s quarterly auto insurance price index recorded the largest annual fall in auto insurance prices in more than six years.
The average price paid by drivers is now £ 538, down £ 87 from the same period last year.
This means that insurers have significantly lowered their prices since the start of the Covid-19 pandemic.
The pandemic was financially difficult for many people, so there is no doubt that a drop in the annual car insurance bill was welcome.
But why exactly have the prices fallen so much?
New freedom of information data obtained by Confused.com shows a 26% drop in road accidents last year.
And according to the data, police forces reported 192,001 traffic accidents in 2020 – most of which were passed under lockdown restrictions.
This is a decrease from 258,994 in 2019.
This equates to 710 reported accidents per day in 2019 and 525 in 2020 on average.
This is arguably due to the fact that UK roads were significantly quieter last year, which meant that the chances of accidents were much lower.
Between confinement and telecommuting, driving has become a novelty for some.
In fact, the number of times per week that drivers would use their cars fell from five to three during the pandemic, on average.
And that means that the number of kilometers people travel each year has drastically decreased.
Average annual mileage in the UK has risen from 7,239 before the pandemic to 4,113, research shows, and data shows that could continue as restrictions ease as more than one in three UK drivers (37%) say they’re likely to use their car less once we’re out of containment.
For almost two in five (38%), this is because they will not travel to work as often, while almost one in three (31%) will make fewer trips across the Kingdom. -United.
Likewise, the number of drivers taking their cars off the road increased dramatically at the start of the pandemic.
Data from the DVLA shows that the number of people requesting Off-Road Legal Notification (SORN) increased from 250,352 to 526,747 between February and March last year.
In total, nearly 3.6 million successful SORN requests were filed last year, up from 3.4 million in 2019.
The equivalent of 3.7 million UK drivers also sold their cars during the pandemic, with more than one in four (27%) saying they could not justify paying taxes and insurance on a car that ‘they weren’t using.
One in four (25 percent) also found that they no longer needed the car, while more than one in seven (15 percent) just needed the money.
With so many cars sold or sitting at home in the driveway, the number of cars on UK roads was significantly lower during the Covid-19 pandemic, meaning the risk of accidents was much lower than usual.
And this is a key consideration for insurers when offering a customer a price for their auto insurance.
As the risk decreased, insurers were able to lower their prices to reflect the fact that fewer claims were likely to be made, meaning drivers were able to realize significant savings when finding their car insurance.
However, it’s not just the reduced risk on the roads that arguably contributes to today’s auto insurance costs.
Figures released by SMMT in 2020 show that new car sales in March and September of last year were at their lowest for 10 years.
As a general rule, newer cars are more valuable which means they are much more expensive to insure as the cost of repairing any damage in the event of a claim would be higher.
With far fewer new cars on the road, insurers were less likely to shell out heavy claims for new cars.
It’s not just auto insurance that helps people save money.
The way people use their cars has also changed a lot over the past year, which means that many drivers have seen significant savings on their regular expenses.
Drivers say they saved £ 92 per month, or £ 1,104 over a 12-month period, on average.
For the most part (83%), these savings were due to generally lower fuel consumption, while almost one in two (49%) saved money by making fewer long trips.
One in four (25%) also saved money by having fewer or no repairs done on their car.
However, this could be because many garages were forced to close during the early stages of the lockdown, when the government announced the MOT holiday – entitling people to a six-month extension of their MOT certificate.
More than one in seven motorists (15%) took advantage of it, which equates to six million drivers.
The lockdown also triggered a change in behavior among drivers, raising awareness among some of the impact their driving habits have on the environment.
Emissions were reported to have dropped 10% during the Covid-19 lockdown, which could explain why nearly a third (31%) of drivers who said they would use their cars less in the future claimed they would do it because they were aware of the impact it has on the environment.
Almost a third (29%) of drivers even said they would consider buying an electric car in the future.
Almost one in ten people (nine percent) would even seek to reduce the number of cars in their household.
While it’s clear that the lockdown has helped many drivers save money – which has undoubtedly been welcomed during a considerably difficult time for many – the lockout restrictions are starting to ease.
While many drivers may now think they won’t be behind the wheel as often, the opportunity to get out and explore, or visit family and friends further afield when it’s safe to do so, might be too great an opportunity to miss.
And as traffic slowly increases over time, we might start to see the number of crashes increase, with mileage returning to pre-lockdown numbers and people looking to invest in newer cars again. .
And with that, the prices of auto insurance could start to climb over time.
But how quickly all of this is happening remains to be seen.
Confused.com auto insurance expert Alex Kindred said: “We are seeing drivers paying the lowest price on auto insurance since 2016, which we have no doubt many people will welcome afterward. an incredibly difficult and eventful year.
“And that’s just because so much has changed since the Covid-19 pandemic hit in March of last year.
“Our report shows that the roads are much quieter, and the police are reporting a significant drop in the number of accidents they deal with.
“All of this means that insurers face a lower risk of paying claims. And the good news for drivers is that it translates to lower prices for them.
“However, as we ease off the lockdown over the next few months, things should return to a certain sense of normalcy.
“It remains to be seen how this affects driving habits.
“Even if insurance prices start to climb, there are still ways for drivers to cut costs, although it can be confusing where to start.
“We have compiled our best tips – and the first thing to do is update your mileage. If you move less or do less long-distance trips, it could save you a few pounds. ”