Wednesday 12th April 2006
Car insurance premiums have dropped in recent months, according to the AA.
The companys British Insurance Premium Index shows that comprehensive car insurance fell by 0.5 per cent during the past three months while for third party, theft and fire insurance, prices were down by 1.74 per cent.
It is thought that healthy competition between insurance firms is mainly responsible for the lowering of prices which now stand at an average £758.38 a year for comprehensive rates with third party, fire and theft costing £956.88.
Kevin Sinclair, managing director of AA Insurance, said: "New channels and insurers are forcing existing providers to increase spending on advertising to maintain market share and this almost exclusively focuses on premiums."
However, Mr Sinclair added he expects prices to shortly rise as companies will not be able to endure the increasing number of pay-outs with low premiums.
The AA claims that by shopping around, comprehensive insurance can be found for just £464 a year, with third part fire and theft available at just under £550. 
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