Premiums were down an average 1.4% in the first three months of 2013, the results of the AA British Insurance Premium Index show.
Statistics reveal that the cost of an annual comprehensive policy tracked by the AA is now an average of £746.75.
Over the past year this represents a fall of 4.1% and welcome news for cash-strapped drivers.
The good news continues as the AA expects premiums to continue to fall thanks to insurers now having access to DVLA records to track fraud.
Simon Douglas, the director of AA Insurance, says the news of reducing costs for motorists follows three years of big increases in car insurance prices.
Insurers have struggled to balance premiums against claims costs with sharp rises in injury claims, fraud and the number of uninsured drivers on the roads.
Other changes in regulations have also increased the cost of insurance, he explains.
But the downward trend is set to be helped by still more changes, Mr Douglas continues.
The first parts of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) came into effect at the start of April 2013, and other changes will follow in the coming weeks.
These reforms cover issues such as referral fees for injury claims; ensuring costs are proportionate to damages, limits on additional liabilities and solicitor success fees, a reduction in fixed legal fees and an increase in the small claims court limit for personal injury cases.
Such changes will help to bring no-win, no-fee injury claims under control, reducing the costs of claims, Mr Douglas said.
Furthermore, the government continues to take action to cap soaring whiplash claims, with a public consultation recently closing prior to more expected legislation.
Around three-quarters of road accidents result in an injury claim, which adds up to 570,000 claims a year at a cost of £2 billion in pay outs for insurers. That cash comes out of driver’s premiums.