The average cost of car insurance in the region has fallen by £122, or 14 per cent, in the past 12 months.
Drivers in the North East can now expect to pay £726 for their car insurance, on average, according to the latest car insurance price index by Confused.com, powered by WTW.
This is the cheapest price recorded in 18 months.
Car insurance prices in Sunderland have seen the biggest drop in the past 12 months.
Motorists in the area are now paying £797, which is £148, or 16 per cent, lower compared to this time last year.
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However, despite these steep decreases, this is still the most expensive area in the region for car insurance.
Across the UK, prices have fallen by £161, or 16 per cent, in the past 12 months, the biggest annual decrease in car insurance prices in more than 10 years.
This puts the average UK premium at £834, the lowest recorded in 18 months.
Rhydian Jones, motoring expert at Confused.com, said: “Car insurance prices have dropped significantly, with the average premium in the North East at the lowest point in 18 months.
“After a turbulent couple of years and record-high prices, this is the good news we’ve all been waiting for.”
Despite the falling prices, more than half of drivers who received their renewal price last quarter claimed their price had increased by £78, on average.
This suggests that while the average price of a new policy is more than £160 cheaper than this time last year, renewal prices aren’t reflecting the same savings.
Mr Jones added: “It’s clear that not all drivers are seeing these savings.
“Those who’ve received their renewal recently might’ve seen their price increase.
“Ultimately, the only way to know you’re getting the best price is to shop around.
“The price of car insurance is cheaper now than before, but many people aren’t getting the same savings when it comes to their renewal price.”
The research also shows that many drivers are taking extra measures to afford their insurance.
Almost 19 per cent have had to take money out of their savings to pay for their policy, while more than 15 per cent have had to cut back on personal spending.