Car insurance costs drop by 12%, finds AA

caR insurance premiums have plunged at a record rate of 12 per cent year-on-year amid a clampdown to combat bogus claims which have forced up costs.

the typical quote for comprehensive car insurance cover was £568 in october, marking a 4.5 per cent drop on July and a 12.4 per cent fall on a year ago, according to the latest aa Insurance premium index, which takes the average of the five cheapest quotes on the market.

this is the biggest annual slide the aa has on its records, which go back to 1994, and marks a turnaround for motorists following a period of big rises, with premiums rising by more than 40 per cent just two years ago.

People aged in their early 20s to late 30s have seen the biggest drops in premiums over the past year, with falls recorded across all age groups, aa Insurance said.

drivers in Scotland have seen the biggest fall in their premiums over the past quarter, with a 5.5 per cent drop taking costs to £424 on average. Scotland re- mains the cheapest place to insure a car in the UK.

East anglia has seen the smallest drop over the past three months, with a 1.4 per cent fall to £538 on average. the northwest of England has the highest premiums at £899 typically, although this marks a 5.1 per cent drop on the quarter.

the findings come as Justice Secretary chris Grayling unveiled tougher action to combat whiplash injury fraud. new independent medical panels will be introduced to weed out the fraudsters.