Coronavirus pandemic drives down the cost of car insurance

Coronavirus pandemic drives down the cost of car insurance

The average motor premium plummets to £697

Brean Horne
Fri, 05/22/2020 – 12:08

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Drivers could make a big saving when insuring their vehicles as motor premiums have fallen to their lowest level in four years, according to comparethemarket.com.

The average car insurance premium plummeted to £697 in April this year, £33 less than the month before, the price comparison website found.

Premiums have fallen by £56 on average since February, when the coronavirus outbreak began to take hold in the UK.

Why is car insurance cheaper?

Fewer cars have been on the road since the government lockdown was introduced in March, which has led to the number of accident claims falling.

This has allowed some insurers to offer lower premiums to new customers.

Cheapest areas for car insurance

Drivers in the South West of England paid the least for car insurance in April. The average premium in the area was £518.92.

Scotland was the second-cheapest region for region for car cover, with motorists paying an average of £552.24.

The price of motor insurance in Wales came in third cheapest and cost drivers just £575.82.

Motorists in Greater London faced the most expensive car premiums in April.

The average premium in the area was £1,049.42, more than double what drivers in the South West paid.

The table below shows the average cost of car cover in each region for April 2020.

Region Average premium
South West £518.92
Scotland £552.24
Wales £575.82
South East £604.95
East Anglia £637.09
East Midlands £652.33
North East £667.23
Northern Ireland £689.31
Yorkshire and the Humber £746.11
West Midlands £774.51
North West £788.95
Greater London £1,049.42

Source: comparethemarket.com

Younger drivers save the most

Drivers aged between 17-24 have benefitted the most from the latest reductions in car insurance prices.

Premiums for this age group have dropped by £69 month-on-month during April, a total decrease of £154, or 12%, since February.

Dan Hutson, Head of Motor at comparethemarket.com says: “With young drivers facing higher driving costs than any other age group, and 63% of those aged 16-24 having previously said they will no longer be able to afford to run a car if motor costs rise, this reduction in premiums should go a long way in keeping our younger drivers on the road.”

Getting a car insurance refund

At the end of April, car insurance providers started to refund customers or offer them cheaper premiums because the lockdown meant fewer people were driving.

Admiral was the first to announce that it would be offering a £25 flat-rate refund to all its car and van insurance customers.

This was followed by LV, which now offers refunds of up to £50.

Other top ten car insurers told Moneywise they were are also considering refunds or offering discounts to customers.

It may be possible to get a reduction in your premium if you get in touch with your provider.

For example, they may be able to reduce your mileage, if you are not driving as much due to lockdown, which will bring down your premium.

How to get cheaper car insurance

Whether you are looking for a new car insurance policy or hoping to renew, these tips can help you find the most competitive car cover.

1) Do not auto renew

Loyalty does not pay when it comes to insurance and providers often reserve the best deals for new customers.  Shopping around for car cover can help you find the best offers.

Price comparison websites allow you to compare hundreds of deals quickly and easily. It is also worth researching the level of customer service each provider offers, to ensure that any claims and queries would be handled efficiently.

2) Read the terms and conditions carefully

Once you have got a few providers in mind, read the terms and conditions of each policy carefully to make sure you will get cover for the things you need.

If anything is unclear, get in touch with the provider for clarification. Once you sign up to a policy, you will not be able to claim for things that are expressly excluded.

3) Pay annually

Paying for car insurance in one lump sum is usually cheaper than monthly instalments.

This is because paying monthly is essentially like paying off a loan, and providers add interest to each payment.

If you cannot afford to pay it all in one go, it is worth trying to get a 0% interest credit card to make the payment.

That way you can benefit from a cheaper premium and repay in monthly instalments without incurring interest.

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Mortgage payment holidays extended for three months

Mortgage payment holidays extended for three months

Homeowners struggling to pay their mortgage can put off repayments until October

Stephen Little
Fri, 05/22/2020 – 10:41

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Homeowners having difficulty paying their mortgage due to the coronavirus outbreak can extend their payment holiday for a further three months, until October.

In March, chancellor Rishi Sunak announced a three-month mortgage payment holiday for homeowners in financial difficulty because of the pandemic.

More than 1.8 million mortgage payment holidays were taken up, and the first of these will be coming to an end in June.

But the Government today says it is extending the mortgage holiday application period until 31 October for homeowners who have not yet taken one.

The current ban on repossessions of homes will also continue until 31 October.

Christopher Woolard, interim chief executive at the Financial Conduct Authority (FCA), says: “Our expectations are clear – anyone who continues to need help should get help from their lender. We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.

“Where consumers can afford to re-start mortgage payments, it is in their best interests to do so. But where they can’t, a range of further support will be available.”

What do the changes mean for you?

Lenders will be contacting customers whose mortgage holiday is coming to an end to discuss next steps.

The Government says homeowners who have taken a mortgage holiday will have to start making repayments if they can.

Other options may include making a proportion of their monthly payment, or temporarily switching to an interest-only mortgage.

Homeowners can also extend the term of their mortgage in order to bring their monthly repayments down.

How do you apply for a mortgage holiday?

Lenders are offering customers who are up-to-date with their mortgage payments and impacted by the coronavirus the ability to self-certify.

Under usual circumstances, the lender would have to assess the customer’s finances, but this is being waived.

Customers who have been impacted by the coronavirus and are concerned about their financial situation should contact their lender as soon as possible.

What does it mean for your credit score?

The FCA says that taking out a mortgage holiday should not have an adverse impact on a customer’s credit score.

However, lenders may take this into account when you apply for loans in the future.

What does it mean for your mortgage?

While the homeowner is not paying their mortgage, they are still accruing interest which will have to be paid at a later date along with the missed homeloan instalments.

This means that when your payment holiday comes to an end your outstanding mortgage payments and balance will be higher.

Myron Jobson, personal finance campaigner at Interactive Investor (Moneywise’s parent company), says: “Payment holidays only offer a temporary reprieve and sooner or later mortgage holders will have to pay what they owe.

“It is important to flag that while mortgage payment holidays should not have a negative impact on credit files, lenders may still take them into account to assess creditworthiness. So there are no easy options, but it does allow some reprieve, and more time for people to plan their financial affairs.”

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More over-55s going online in lockdown, but many still shun digital banking

More over-55s going online in lockdown, but many still shun digital banking

Older generations apprehensive about security and struggle with web access

Stephen Little
Wed, 05/20/2020 – 16:20

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People over 55 are using digital services than ever before since the introduction of the lockdown, but many of them still will not bank online, research shows.

More than half (54%) of over 55s are using the internet more since the start of the pandemic, according to Santander.

One in five (17%) of this age group have signed up to at least three new online entertainment, socialising or shopping services since the pandemic began. 

They put their increased online usage down to spending more time indoors, saving time and wanting to join in with what their friends and family are doing.

However, while more people over 55 are going online, almost one in five (16%) in this group are choosing not to use their bank’s digital services. 

Santander says the over-55s are the age group most reluctant to bank online since the pandemic began.

However, the bank’s online chat service, which allows customers to do tasks such as balance enquiries, has been more popular since the pandemic began.

The over-55s account for one in four (27%) of all users of this online chat in March.

While the growth of digital banking means you never have to step foot in a branch again, many people are still apprehensive about going online.

One reason people do not bank online is because they are worried about security issues.

Lots of people also do not have the option of going online to bank as they do not have access to the internet, or live in a part of the country where web speeds are so slow this becomes impossible.

With banks increasingly closing physical branches to focus on online banking there are also fears that customers could be left behind.

Additionally, if someone has a financial emergency during the lockdown period it will be much quicker and safer to tackle for users of online banking.

Chris Ainsley, head of fraud strategy at Santander UK, says: “For those who feel confident and comfortable after experimenting with other online services, then now is a perfect time to put digital banking to the test.”   

Tips for staying safe when banking online

Keep your login details safe at all times. Avoid writing them down and do not share them with anyone.

Never share your One Time Passcode (OTP) with anyone. 

Never let a cold caller talk you into giving them access to your device or downloading software.

Do not be lulled into entering your online banking details after clicking a link in an email or text message. If you are logging in to online banking, type the full address into your web browser.

Install the latest security updates to your system software as they become available. 

Make sure you fully log out of online and sign out of the mobile app once you’re done if you are using public wi-fi.

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