Friday, January 18, 2013

Love and marriage – the secret to eternal happiness and cheaper car insurance

Image courtesy of David Castillo Dominici /
How does a spare £100 sound to you? That’s about what you’ll be getting if you get a car insurance policy these days. Your average premium is now £107 less than it was last year, coming in at £737 and with a whopping 12.7% reduction. With the biggest reduction in premiums in the last five years, it looks like all that hoo-hah about the EU Gender Directive jacking up our prices was just hot air, right? Well, not quite.

Every three months, team up with the guys at Towers Watson to create the Car Insurance Price Index – a detailed look at what people are paying for their car insurance and who’s getting the biggest discounts. All the figures quoted here are averages based on an annual comprehensive policy.

Gender blues

First of all, I have some bad news for the young lady drivers who are reading this. It seems that the EU Gender Directive did some damage even before its official launch date on December 21st (maybe that’s what the Mayans were counting down to, after all). In the last three months of 2012, female drivers aged 17-20 were paying an extra 1.4% on their premiums compared to 2011, bumping their costs up to £1,986. 1.4% might not sound all that much, but when you consider that everyone else paid at least 6% less this time around (and in the case of 17-20 male drivers, their prices were slashed by a fifth) you might feel more than a little annoyed, and rightly so. Luckily, the gap is a lot less for family drivers i.e. married drivers in their 30s , who are paying roughly between £375 and £550 per year for both men and women.

The price gap between men and women is narrowing, which is a predicated outcome of the effects of the Gender Directive since insurers are no longer able to take gender into account when working out premiums. Bear in mind that this was the calm before the storm, before the Gender Directive actually took effect. The next few months may see an even tighter gap between the sexes, meaning young women could be paying a lot more again. On the plus side, up until the directive hit, young women paid about £1,000 less than men (£1,986 versus £2,960 for men) so there’s still a silver lining for this cloud.

Discount nuptials

If there was ever an excuse to settle down and start a family, having cheaper car insurance certainly isn’t the best one (who does that?). That being said, married women on the whole are paying less for their car insurance than single ladies, with women between 31-35 paying £165 less than their unmarried counterparts (£449 for a woman with her spouse on a policy, £614 for a woman as the only insured driver). The only exception to this trend is, once again, our 17-20 female drivers. Adding their partner to their policy actually increased their premium from £2,081 to £2,089. Again, not a massive increase, but the only ones that have to pay more for the privilege.

A surprise increase

People believed that the effects of the Gender Directive would be worst felt in the big cities like London. In a surprising turn of events, this isn’t the case. Whilst these areas are amongst the highest for price increases for young women, the worst offenders are the East Midlands (a 4% increase on last year) and Northern Ireland (a 12.7% increase). On the flip side, there is some good news for the ladies in the North East – you’re one of the only areas in the country to see a reduction for female drivers (a 3.1% reduction on last year, averaging at £1,952).

So, to the young ladies living in Belfast or Nottingham – if you want a chance at knocking off a few quid, don’t get married until you’re 30 and start looking at houses in York. For family drivers, it doesn’t matter which of you is in the driver’s seat, your premiums are more or less the same.

Jamie Gibbs writes about motoring and all things on four wheels for car insurance comparison site
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