AA reports fall in car insurance premiums

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Car insurance premiums have fallen over the first quarter of 2007, according to the AA.

In its British Insurance Premium Index, the AA found a £4 decline in the average price of car insurance.

A typical policy now costs £802, compared with a year-end figure of £806 for 2006, the index showed.

While the 0.5 per cent fall follows a 4.35 per cent increase in the last quarter of the year, managing director Kevin Sinclair welcomed the news.

"I had expected premiums to continue rising and I think the underlying pressure is still upward," he explained.

Mr Sinclair added: "I believe that we will see further increases as the year progresses."

According to the spokesperson, the decline may be attributed to online providers offering discounts as introductory offers.

In a survey of new business quotes, the AA claimed that one in ten people could save as much as 35 per cent on their car insurance costs by switching to the provider.

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