Assisted with the rise in Insurance Premium Tax having doubled from 6% in 2015 to 12% in this last month, and the average UK policy now costing a record-breaking £800 average per annum, it is safe to say that the cost of car insurance premiums has increased rapidly; drivers having fallen victim to this significant rise in price, forking out an average of hundreds of pounds more than they were five years ago.
Although these statistics suggest a strong average increase in the price of car insurance premiums per annum, there are however fluctuations in such prices throughout the year that drivers should be made aware of; with reports having shown that car insurance premiums, on average, significantly increased in the period of 2018 from September to November (part of the final 2018 quarter).
Following this pattern, insurance companies will remain at such rates throughout the December period, with the average car insurance policy 13% higher in this month with comparison to the rest of the year. Andrew Speer from price comparison site Proper Finance claiming, “insurers have less incentive to lower their prices” during the month of Christmas. This can be put down to two main reasons:
- Insurance companies are tending to draw to a close for the Christmas period.
- Drivers during this period typically have their financial priorities on family and friends for holidays, travel costs, days out, meals out and Christmas presents etc.
Therefore, with the decline in customers and pending office closure for employees’ end-of-year holidays, there would be no benefit in lowering insurance premium costs at such a time in the year, and further no incentive to do such.
This cannot, however, be said for the succeeding month of January, Speer further stating the month to be “a great opportunity to start off the new year with a good saving”. Fleets Insurance investigates.
So, Why is Car Insurance Cheaper in January?
One thing to lift your spirits in the lull of post-Christmas blues is that car insurance premiums tend to be at their very cheapest during the month of January.
In an attempt to scrimp following the most expensive month of the year, many drivers use January to search for cheaper deals and better renewals on their car insurance premiums. In response to this trending surge of drivers looking for better savings on their insurance packages, car insurance providers typically lower the prices of their premiums in an attempt to not only beat the competition but also to increase their customer base in season notoriously stagnant in the financial department.
Therefore, an awareness of such fluctuations throughout the year can provide financial benefits for drivers, allowing them to save significant portions of money by identifying periods throughout the year where the insurance premiums are at their cheapest.
Other Ways to Reduce Your Car Insurance Premium
In addition to finding competitively cheap deals and renewals on your car insurance premiums throughout the month of January, there are other methods which could help you to reduce premium costs even further, such as those detailed below:
- Pass Plus test – this is a training course, the duration of which is, at the very least, 6 hours long, and is taken for drivers wanting to improve on their driving abilities, ensuring an increase in relative skills and safety. Drivers who take a “Pass Plus” driving course (and pass!) can also be entitled to a discount on their insurance, reducing car insurance premium significantly.
- Black box insurance – this is a specified type of car insurance which can also significantly reduce the cost of car insurance premium. Drivers are fitted with a device which records their driving behaviour in the car, and rewards good driving (i.e. keeping to the speed limit, obeying all road signs etc.) with lower costs for insurance premiums.