Comprehensive car insurance premiums in the UK have declined by 16% (£136) over the past year, with the average annual cost now at £735, according to the latest Confused.com Car Insurance Price Index, produced in partnership with WTW.
The data show that average premiums have dropped by £260, or 26%, since reaching a peak of £995 in December 2023. This marks the seventh consecutive quarter of falling prices, with a 3% (£22) decrease recorded in the most recent quarter.
According to the General Insurance Price Index from Pearson Ham Group, the UK motor insurance market is showing signs of stabilisation after a period of sharp corrections. The market is now expected to enter a steadier phase, with future trends likely to depend on claims severity, repair costs, and the level of competition for new business.
Confused.com’s index shows that drivers under 25 have seen an average annual reduction of 17% in their premiums. Among this group, 17-year-olds experienced the largest decrease, with premiums falling by 28% (£780) to £2,008.
Eighteen-year-olds saw a 20% drop, bringing their average premium to £2,342. For drivers over 40, premiums declined by 15% on average, while those aged 52 recorded a 13% (£86) reduction, resulting in an average annual premium of £585.
However, recent data from Consumer Intelligence indicate that not all age groups have benefited equally. While overall UK car insurance premiums have dropped by 10.5% over the past year, premiums for drivers under 25 have actually risen by 3% in the last quarter. This reversal is attributed to less interest from telematics providers in offering competitive rates to younger drivers, particularly those aged 17 to 19, who are now seeing fewer price cuts from insurers.
Steve Dukes (pictured above, left), CEO at Confused.com, noted that while prices have been falling, they remain 25% higher than three years ago.
“It’s important that, as an industry, we don’t lose focus on the underlying factors which are pushing premiums higher than they have been historically. There’s still a significant opportunity to work together to deliver further value to customers,” Dukes said.
The Confused.com report also notes that all UK regions experienced lower premiums over the past year. Manchester and Merseyside recorded the largest regional decrease at 19% (£204), with average premiums dropping from £1,063 to £859.
The North West followed closely with a decrease of just under 19% (£154), reducing premiums from £830 to £676. Northern Ireland saw the smallest reduction, with a 9% (£80) fall to £849.
South West England remains the least expensive region for car insurance, with average premiums at £499. Central and North Wales follow at £514. Inner London continues to be the most expensive area, though premiums there have decreased from £1,377 to £1,149.
Local data indicate that Liverpool and Warrington, both in the Manchester/Merseyside area, experienced the steepest annual falls in premiums, at 21%. Liverpool’s average premium declined from £1,031 to £819, while Warrington’s fell from £855 to £678. West Central London, the country’s most expensive postcode, saw a 16% (£264) reduction to £1,394.
Llandrindod Wells in Wales remains the cheapest town for car insurance, with average premiums at £467 following a 13% annual decrease. Torquay (£477), Dorchester (£481), and Exeter (£484) also report average premiums below £500.
Tim Rourke (pictured above, right), UK head of P&C pricing, product, claims and underwriting at WTW, said the ongoing decline in premiums may be linked to market consolidation and lower claims frequencies in certain segments.
“Average premiums have now dropped for the seventh consecutive quarter despite a backdrop of high vehicle repair costs and third party injury claims inflation running higher than CPI levels,” he said.
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