Cheaper car insurance because of competitive market, says expert

Wednesday, 16 March 2011

Customers looking for the best deal on car insurance could find that they are faced with plenty of options due to increased market competition, according to one expert.

Lindsay Williamson, secretary of the Insurance Society of Edinburgh, said that most insurance products are price sensitive but companies competing in the market now are probably finding it a bit overcrowded.

Mr Williamson added: "Companies are undercutting other companies for huge sums. When you get to that stage, a lot of companies are clearly writing for market share, not profit."

However, the expert believes the market is probably as competitive as it has ever been.

Furthermore, he added because of this extra competitiveness, smaller providers of car insurance struggle to make a profit as the interest rate is so low.

Recently, the British Chambers of Commerce urged the Bank of England not to raise interest rates this week as it feels it could weaken the economy.

Posted by Claire Carter

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