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Short-term reduction in car insurance premiums

In a surprising development the AA has revealed a fall of 3.2% in car insurance premiums in the first three months of 2010. This compares to an increase of 18.7% during the whole of 2009 with the average cost of comprehensive car insurance cover now standing at £968. So what does the rest of 2010 hold for the UK car insurance industry?

Unfortunately, UK motorists are likely to be hit with an increase in car insurance premiums throughout the rest of 2010 and ultimately it looks as though premiums are set to increase for the foreseeable future. The reason given for the average reduction in car insurance premiums is a reigning in of prices by those at the more expensive end of the market. There is also the fact that many insurance companies have effectively used up their reserves which historically they have used to try and smooth out the gradual increase in car insurance premiums.

So while UK motorists will be relieved to see that car insurance premiums have fallen in the first three months of 2010 this could be something of a false dawn and yet more false hope for UK motions. When will UK motorists actually get a break?

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