- Average car insurance costs in the UK are now £861.
- Even though prices are dropping annually, nearly two thirds of drivers (60%) received a higher renewal price last quarter, of around £84 on average.
- But data also shows that shopping around at renewal can save drivers even more money, with additional savings of £81 to be made, on average.
- Data suggests adding a spouse or shopping ahead of time could save drivers hundreds of pounds.
- With more deals available to drivers shopping around, experts at Confused.com provide tips to help drivers save even more.
After nearly 3 years of rising car insurance costs, prices have fallen by £63 in the past 12 months, on average, new data reveals.
Drivers in the UK can now expect to pay £861 for their car insurance, on average. This means those shopping around and buying a new policy could be saving money compared to this time last year. That’s according to the latest car insurance price index from Confused.com powered by WTW. Because it’s based on more than 6 million quotes a quarter, it’s the most comprehensive car insurance price index for new policies in the UK.
According to the data, this is the first time prices have dropped annually since the end of 2021. This might offer some respite to drivers after paying exceptionally high prices in the past 2 years. However, prices have been dropping slightly quarter-by-quarter since the beginning of the year. This signalled a U-turn in pricing trends. In the 2 years prior to this, prices were rising rapidly, with annual increases as high as 58%, where premiums hit record highs.
However, further research shows that some drivers are still facing increasing prices from their current insurers. In a survey of 2,000 UK drivers(1), nearly 2 in 3 (60%) received a higher renewal price from their insurer, of around £84, on average. And it’s clear that shopping around is saving people money. That’s as almost 2 in 5 (38%) drivers who had a higher renewal quote shopped around instead and switched insurers. This resulted in them saving £81, on average.
While data suggests that drivers shopping around are likely to see a cheaper price now compared to last year, there are still ways to save money. In fact, additional data from Confused.com found that those shopping around ahead of time are able to save a significant amount on their premium. For example, those who take out a policy 18 days before their renewal date paid 48% less than those who bought the day their renewal was due(2).
Another way drivers could save money is to add a named driver to their policy if they’re likely to use their car from time to time. According to our latest price index data, those who have a named driver on their policy are paying £125 (13%) less than those on a single-person policy. And the savings are even greater for those who have their spouse on their policy, of around £363 (38%), on average.
But if this isn’t possible, things like adding additional security measures could contribute to cheaper prices. For example, adding a steering lock or a tracking device, or opting to park off road or in a secure location. Even something simple like reviewing annual mileage could help reduce insurance costs. This is because your annual mileage gives an indication of how often you are driving and therefore the likelihood of making a claim. But it’s important to make sure you’re being accurate with this. Confused.com’s experts offer more tips on how to get cheaper car insurance.
While there are ways motorists can save on their insurance, the only way to know they’re getting the best price is to shop around. With prices falling, the insurance market is expected to be more competitive than ever, with more brands entering the market and current insurers offering a wider variety of policies. This increases drivers’ chances of finding a better deal or a more suitable policy for them.
Despite prices dropping for most drivers, prices are still high compared to 2 years ago. So it’s important they’re taking measures to reduce their premiums.
And the price drivers are paying will vary from the UK average, depending on their age or where they live. In fact, motorists in London are paying significantly higher than the national average. In Inner London, premiums are now £1,357, despite falling by £146 (10%) in the past 12 months. This is the steepest annual decrease seen in all regions of the UK. This is followed by Manchester and Merseyside, where prices fell by £102 (9%) to £1,052, on average. Drivers in South Central England have also seen a significant drop in their premiums of £73 (8%). The average price of insurance in the region is now £815.
However, Outer London and the West Midlands are among the highest paying regions, where premiums are now £1,104 and £1,068 respectively, on average.
On a more granular level, London City has seen the biggest drop in prices. Drivers in this area are now paying £189 (13%) less than this time last year. This is followed by Wigan, where prices fell by £104 (11%) year-on-year. The cost of car insurance in these areas is now £1,253 and £830, respectively, on average.
Younger drivers are also typically paying a lot more than the UK average. In fact those aged between 17 and 20 are paying more than £2,000, on average. In particular, 18-year-olds are paying £2,886, while 20 year olds are paying £2,200, on average.
Meanwhile, 23-year-olds are facing the steepest decreases, with prices for this age now £168 (9%) cheaper than 12 months ago. This means drivers of this age are now paying £1,671 for their car insurance. And 22, 26, 27, 39 and 45 year olds have also seen an annual decrease of 9% on their premiums. This ranges from £84 to £167 less compared to last year.
While most drivers are seeing savings, 17-year-olds are the only age group to be paying more now compared to 12 months ago. Prices for these young drivers increased by £114 (4%) over the past year, meaning they’re now paying £2,727, on average.
But despite most drivers shopping around being better off on their insurance compared to last year, the cost of car insurance is impacting many drivers. In fact, further research found that 1 in 5 (19%) motorists consider their car insurance to be one of their biggest expenses. And nearly 2 in 5 (38%) say their insurance is more expensive now than it has ever been.
Even with the news of falling prices, it’s important drivers don’t get complacent with their car insurance. This is especially important even if they see their renewal price drop, or stay around the same. That’s because the latest data shows that shopping around is more than likely going to result in saving money.
Rhydian Jones, motoring expert at Confused.com car insurance comments, “After a long period of seeing their car insurance increase, the news of prices starting to come down will be a relief to drivers. It’s the respite we’ve all been waiting for.
“However, prices are still a lot higher than they have been historically. Many of us will still be paying more than we have in the past, despite gaining more driving experience or building up our no-claims bonus. This is why it’s so important to keep shopping around and to make changes to our driving habits if we can. We could also change how we use our cars to see if we could bring our price down even further.
“If you are likely to share your car and are able to add a named driver, ideally who has more driving experience, this could offer some savings on your price. Similarly, shopping around with plenty of time is known to offer significant savings. Or if this isn’t doable, moving your car to a more secure location overnight or adding more security could help save you some money.
“But the important thing to remember is not to accept your current insurer’s renewal quote without looking elsewhere first. That’s why price comparison sites are a great way to check whether you’re getting the best deal. And with a much broader market now than we’ve seen in the past, it’s highly likely that there will be a better policy out there for you, at a better price. We’re so sure on this that we offer to beat your renewal. And if we can’t, you’ll get the difference, plus £20(3).
“There’s no guarantee that prices will continue to fall, especially as insurers continue to face the challenge of rising claims cost due to inflation. So taking steps to make sure you’re getting the best price is still as important as ever.”
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