The postcodes with the cheapest car insurance

The average price quoted for annual comprehensive motor insurance has fallen by a record amount again this year, according to the latest AA British Insurance Premium Index.

But if you live in certain parts of the UK, th? news won’t be bringing you any joy. Though the average price has fallen, some regions have experienced price increases. And despite premium costs falling by over 7% in others, drivers in those areas can still expect to pay a lot more than the average.

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Postcode lottery

The AA says that the study reinforces the importance of a person’s home postcode when calculating premiums.

Janet Connor, managing director of AA Insurance, says the pricing differences are due to a range of factors, from the age and experience of the driver to the higher risk of a collision in an urban area. Also taken into account are the number of car crimes “such as theft of or from a vehicle, uninsured driving or attempts at ‘cash for crash’ fraud.”

“Sadly,” she says, “the criminality of some people has a detrimental effect of the premiums paid by honest motorists in such places.”

The cheapest postcodes

The cheapest car insurance premiums can be found in the Isle of Man, which only has a population of around 85,000. And while that figure might not be helpful to those of us on the mainland, it’s notable that Scotland, Wales and the South West of England have towns that rate rather well against the rest of the nation.

Rank

Postcode area

Average annual shoparound car insurance premium

Quarterly

change

1

IM (Isle of Man)

£231.49

-3.3%

2

KW (Kirkwall)

£252.13

-1.9%

3

TR (Truro)

£279.72

-1.8%

4

AB (Aberdeen)

£285.82

-0.5%

5

DT (Dorchester)

£286.26

-1.9%

6

PH (Perth)

£286.26

-2.4%

7

EX (Exeter)

£289.22

-1.3%

8

TA (Taunton)

£291.88

-3.1%

9

LD (Llandrindod Wells)

£292.74

-3.3%

10

ZE (Lerwick)

£296.39

-4.8%

All of the top ten postcodes have seen premiums fall in the last quarter, and the average price for insurance remains under £300 in each of them.

The most expensive postcodes

Meanwhile, in the UK’s big cities drivers are paying at least double the cheapest UK rates for their insurance. Five of the 10 most expensive postcodes have experienced falls in insurance prices, while five have had theirs increased. But to take one example, even with a 7.2% quarterly fall, people in Oldham can still expect to pay almost £800 a year for their insurance, which is much more than double any of the cheapest postcodes.

Rank

Postcode area

Average annual shoparound car insurance premium

Quarterly change

104

CR (Croydon)

£660.97

+1.3%

105

BD (Bradford)

£661.79

+0.2%

106

L (Liverpool)

£720.00

-2.4%

107

BL (Bolton)

£736.53

-4.4%

108

HA (Harrow)

£764.89

+0.1%

109

OL (Oldham)

£794.78

-7.2%

110

UB (Southall)

£807.11

+3.6%

111

M (Manchester)

£820.63

-4.1%

112

IG (Ilford)

£912.07

+4.5%

113-121

London

£922.44

-5.0%

Source for all tables: The AA

London, unsurprisingly, sits at the bottom of the table; even after a 5% fall in the last quarter. Places 113-121 cover the postcodes W, NW, N, E, SE, SW, EC and WC.

The average cost reflects the number of expensive cars insured in the city, the density of traffic in London, which increases the risk of an accident on its streets, and the increased likelihood of theft or damage.

What next for premiums?

The current pattern of falling premiums can’t last, says the AA's Janet Connor. Noting that there are “some signs of the downward trend reversing” due to average premium increases in some areas of the UK, she says that some insurers are looking ready to put prices up and believes “that this time next year, the AA’s Index will be reflecting a rising trend.”

However, she doesn’t forecast a sharp increase like the inflation between 2009 and 2011 when, over a 12-month period, premiums rose by more than 40%.

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