Car insurance premiums 11pc lower than a year ago The average premium has fallen by 10.6pc to £478, according to Moneysupermarket.com, the price comparison service. The site analysed more than 16 million car insurance quotes over the past year. Following a period of sharp rises in 2010 and the early part of 2011, the company said the cost of car insurance reached a peak of £554 in April last year. Kevin Pratt of Moneysupermarket said: "There is no doubt the cost of motoring has been a hot topic, and issues such as the price of fuel hitting new highs has put additional pressure on already squeezed household budgets. Car insurance inflation was a major issue in 2010 and 2011, which led to a number of government inquiries to try and address the problem. Our analysis shows we are now seeing deflation; great news for motorists - for now. The main factor influencing the cost of car insurance is competition in the market between insurers. A few key insurance providers are looking to take on new business and are willing to offer low premiums to attract customers. While this competition continues, drivers will benefit but there is no guarantee how long it will last. Although every part of Britain has benefited from the downward trend in car insurance prices, the average cost of cover varies considerably across the nation, Moneysupermarket said. Drivers in Greater London pay the highest premiums, with average costs of £748. North West England has the second highest prices, averaging £592, followed by the West Midlands which stand at £516 on average. Those in south Scotland enjoy the lowest premiums - £309, 59pc less than the price paid by drivers in Greater London.