NCA's motor insurance cost comparison reveals potential savings of almost €2,300
- Cost comparison also highlights interest charges of up to 20% for consumers who pay monthly
19 May 2010
The National Consumer Agency (NCA) published its latest motor insurance cost comparison today on its personal finance site, www.itsyourmoney.ie. It shows that young drivers can make savings of over €2,200 when insuring their cars.
The cost comparison also revealed a huge variation in the interest rates charged by firms when consumers pay their premium in monthly instalments. These charges ranged from 4.25% up to 19.9%.
Ann Fitzgerald, CEO of the NCA, remarked: "The latest survey reveals that it is in consumers' interests to shop around for their motor insurance. Quotes for policies are wide-ranging and there are significant savings to be made, whether you choose to shop around yourself or go through a broker.
"As well as their premium, consumers should also check and see if they are paying any interest on their policies. Our comparison revealed that some providers are charging consumers interest of almost 20%, if they opt to pay their motor insurance in monthly instalments."
Consumer profiles
The survey features four consumer profiles, showing the price of car insurance for drivers in Kildare, Mayo, and Kilkenny. Some of the key findings are:
- The largest cost saving was for the 19-year-old female student (profile 1), driving a 2003 Opel Corsa. The quotes for fully comprehensive insurance for this profile ranged from €928 up to €3,161, a difference of €2,233 between the cheapest and the most expensive provider. Two providers were unwilling to quote for this profile
- A relatively minor claim can lead to significant differences in the cost of motor insurance at renewal, depending on the insurer. The 66-year-old male (profile 4), who had his no claims bonus revoked after a previous claim for €500, received quotes which had jumped by as much as €563 compared with the same profile (profile 3) with no-claims history. However, even with a claim on a policy (profile 4), the quotes ranged from €360 up to €1,139. This indicates a saving of €779 between the cheapest and dearest provider for the Kilkenny-based driver of a 1.4L Golf
- The survey revealed savings of up to €338 for a family in Mayo (profile 2) where both the husband and wife were insured on a 2007 1.8L C4 Picasso. Both had full licences and no penalty points. Quotes ranged from €677 to €1,015
Compare insurance costs
Ann Fitzgerald said: "When it comes to making a claim on your motor insurance, you should weigh up the cost of paying for the damage yourself, compared with what it may cost you in the longer term if you were to claim under your policy.
"This is particularly important if you are claiming for a small amount. Ask your insurance company what the likely impact will be on your no-claims bonus.
"If you find your insurance has increased once you have made a claim, make sure you shop around at your next renewal. Our comparison clearly shows that you can still make savings even if you have made a claim."
The motor insurance cost comparison is available in the cost comparisons section of itsyourmoney.ie.
The website provides independent information, in plain English, on motor insurance, including a "shop around checklist" to help keep track of quotes, discounts and benefits offered by providers.
Update: 28 May 2010
Clarification on the motor insurance cost comparison
In the original release issued 19 May 2010 (see above) it was stated that a cost comparison showed the variation in interest rates charged by firms for payment by monthly instalment, ranging from 4.25% (APR) up to 19.9% (APR).
Aviva and FBD erroneously provided the flat rate and not the APR equivalent as requested by the NCA. This results in Aviva's figure changing from 7% to 20.1%. For FBD, the figure has changed from 4.25% to 13.4%.
In the original survey, Allianz stated that it does not charge interest but gave a service charge of 8%. This has been converted from a service charge of 8% to an APR equivalent of 18.6% for comparison purposes below.
These rates have now been updated in the cost comparison on itsyourmoney.ie.
The correct rates charged on monthly instalments (APR) for all firms are as follows:
- Allianz - 18.6% APR charged on instalments
- Aviva - 20.1%
- Axa - 17.04%
- Chartis - n/a
- FBD - 13.4%
- Quinn - 19.66%
- RSA - 13.7%
- Zurich - 19.9%
Learn more
Read more about the online survey on www.itsyourmoney.ie
Download a shopping around checklist (PDF, 440KB)