The average car insurance premium in Scotland has fallen by more than 20%, or £98, to £364 over the past year -the biggest annual fall on record, according to the AA British Insurance Premium Index.

Scotland also enjoys the lowest premiums of any region, below the UK average of £504.

Young drivers have experienced the biggest falls. Premiums are down 24% over the past year for motorists between the ages of 17 and 22. However, they still pay the highest premiums of any age group at an average of £1096 because they are the riskiest category.

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It is the eighth quarter in succession that motor insurance premiums have come down, but Simon Douglas, director of AA Insurance, warns the good times won't last forever.

He says: "This could be the last hurrah for cheaper car premiums. These falls are now becoming unsustainable as insurers are digging into reserves to maintain their competitive edge. Some insurers are also starting to resist pressure to cut premiums."

The AA Shoparound index, which is an average of the five cheapest premiums quoted from brokers, insurers and price comparison sites, dipped by just 6.1% over the three months until the end of June, suggesting that many insurers are starting to increase their prices.

The AA does not anticipate the sort of sharp rises that motorists suffered in 2010 and 2011, when premiums rose by more than 40% in just 12 months. However, the size of any future increase depends largely on the industry's success in the battle against insurance fraud.

Douglas says: "A lot rests on further measures being introduced to stop dishonest people from seeing insurers as a 'soft touch' for personal gain."

Insurance fraud is estimated to add up to £60 to every car insurance policy and experts are calling for more to be done to stem the rising tide of whiplash claims.There are around 500,000 whiplash claims from motor accidents each year and the latest report from the House of Commons all-party Transport Committee puts forward several proposals to limit the number of fraudulent claims.

For example, it suggests whiplash claimants be asked to provide more proof of their injury. It also recommends a time limit on claims.

Aviva, one of the UK's biggest car insurers, would like the industry to shift away from cash compensation for whiplash injuries to a system that pays towards the cost of medical treatment for any injury.

Aviva blames the "crash for cash" culture for the recent boom in slam-ons - where fraudsters deliberately cause a road traffic accident in order to claim whiplash compensation. In 2013, slam-ons increased by 51%, according to the insurer. Aviva says: "We believe, with Government support, that premiums can be cut by another 14% - or £50 on average - for each insured motorist."