Has car insurance gone up in 2025?

The average cost of car insurance in the UK is now £161 (16%) cheaper compared to 12 months ago.

The national average car insurance premium has fallen to £834, this marks the biggest drop in car insurance prices in over 10 years.

Car insurance prices have been steadily dropping every 3 months since the beginning of last year with premiums now at their lowest in 18 months.

Have car insurance costs gone up?

No, if anything, the most recent Confused.com car insurance price index has signalled a U-turn in car insurance pricing. For context, this is the second quarter prices have dropped year-on-year, following more than 2 years of steep increases and record-high prices.

The average price of a new policy is more than £160 cheaper than this time last year. But, if you go further back, premiums are still higher now than they have been in the past.

Why has car insurance gone up?

While the average UK car insurance premium continues to fall, renewal prices aren’t reflecting recent pricing trends. More than half (57%) of those who received their renewal price last quarter claimed their price had increased by £78, on average. That’s according to further research by Confused.com. 

However, evidence shows that shopping around for a new car insurance quote at renewal meant drivers made savings of £71 last quarter, on average.

So, it's always worth looking around for a better deal. Even if your renewal isn't as high as expected, or is only slightly less than the previous year, you could still save money by comparing quotes.

Why is my car insurance so expensive?

Insurance companies consider a mix of personal and external factors when deciding how much you pay. Even if average car insurance costs are down, your personal situation or wider trends might still drive your price up.

If you’re unsure about a specific reason, it’s worth getting in touch with your provider to clarify.

Personal reasons

Even if insurance prices have dropped overall, your individual circumstances could still make costs go up. Here are some personal factors that might affect your premium:

Change in job title: Your occupation can impact your car insurance cost, as some jobs are seen as riskier than others. It's also likely you'll pay more for a policy if you commute to work.

Different car group: Upgraded your wheels? Cars in higher insurance groups tend to be pricier to cover.

Previous claims: Claiming on your insurance, even if it wasn’t your fault, can lead to higher premiums when your policy is up for renewal.

External reasons

Some external reasons can cause car insurance prices to rise across the board. These include:

Inflation: Inflation has seen the cost of parts and labour soar, in turn it's costing insurers more to pay to repair or replace vehicles. As newer cars adopt advanced technology and equipment, it's more complicated to repair and replace certain components.

Car thefts: A rise in car thefts can lead to higher premiums for everyone, even if you’ve never been affected.

How have car insurance prices changed over the past few years?

Car insurance premiums began to rise in 2019. The COVID-19 pandemic keep prices in check as fewer drivers took to the road.

Prices rose significantly as more people got behind the wheel when restrictions were lifted. Coupled with the cost of living crisis, costs soared in 2022 and 2023.

The average cost of car insurance in the UK reached a record of £995 in Q4 of 2023. But since then, costs have declined on a quarter-by-quarter basis.

 

Male drivers pay more than women

Car insurance costs are falling for all drivers regardless of gender, but men generally pay more. Male drivers pay £894, on average. This is down 16% (£167) year-on-year. Whereas women pay £732, on average. This has dropped by 17% (£152) year-on-year.

The EU Gender Directive means insurers can't set prices based on gender. But other risk factors still come into play. Men often drive more expensive cars, which leads to higher claims. They also tend to have more motoring convictions.

These factors contribute to a £162 gender gap in car insurance costs between men and women, on average.

Younger drivers hardest hit

The cost of car insurance is a double-edged sword when it comes to young drivers. On one hand, younger drivers pay more for car insurance than any other age group. 18-year-olds pay more than any other age at £2,605, on average.

On the flip side, there is respite. In the past 3 months alone, prices have shifted significantly for these drivers, and more so than any other age group. For example, prices for 17-year-olds have dropped by £323 (-12%) in 3 months, on average

When will the cost of car insurance go down?

According to our Q4 2024 research, car insurance costs dip below the £1,000 mark when drivers reach the age of 35. At this age, the average premium is £990.

This represents a significant shift, as Q4 2023 research suggested that car insurance prices only fall below £1,000 for drivers aged 43 or over, on average.

Other costs still high

The cost of fuel has fallen as car insurance costs have as of late. On the other hand, the cost of driving is still increasing. If you want to find the cheapest petrol or diesel prices near to you, you can use our fuel price tool.

Petrol now costs £1.38 per litre, and diesel costs £1.44, on average (prices correct as of 13 January 2025).

Getting cheaper car insurance

If you're looking for tips for cheaper car insurance, here are some ways that may help bring the cost down:

Pay annually: Paying for your policy in one go rather than monthly can often work out cheaper. This is because you'll avoid paying interest over monthly installments. 

Black box policy: A telematics policy could lower your costs, especially if you’re a careful driver. Young drivers might benefit from this type of insurance.

Look at the cover type: Check whether the level of cover you’ve chosen suits your needs. Sometimes, comprehensive cover can be better value than third-party only.

Shop around: Using price comparison websites like Confused.com before your renewal can help ensure you get the best deal possible.

Increase your voluntary excess and build up a no-claims bonus: Increasing your voluntary excess means you're willing to contribute more money in the event of a claim. You build up your no-claims bonus each year you drive without claiming on your insurance policy.

What our motor insurance expert says

“Car insurance prices have dropped significantly, with the average premium in the UK 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.

“However, it’s clear that not all drivers are seeing these savings. Those who’ve received their renewal recently might’ve seen their price increase. This can be confusing, as with another year’s no-claims bonus and more driving experience, this should, in theory, drive prices down.

“Ultimately, the only way to know you’re getting the best price is to shop around. In fact, last quarter, those who switched insurers were able to save £71, on average. So before you commit, shop and compare to make sure you’re getting the best deal.”

Rhydian Jones Commercial Director & Motoring Expert

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