- Drivers can now expect to pay £834 for their car insurance - the lowest price in 18 months.
- However, it seems customers who are shopping around are mostly benefitting from these savings. That’s as the majority (57%) of customers who received their renewal last quarter saw an increase in their premium of £78, on average1.
- Motorists could also save a further £71 by shopping around, reducing their premium costs even further.
- Younger drivers benefit from the biggest savings, with 18-year-olds now paying £557 (-18%) less compared to 12 months ago.
- Meanwhile, decreases mean drivers in Manchester and Merseyside are paying less than £1,000 for the first time in 18 months.
- Despite these falls, the average UK premium is 33% higher compared to 2 years ago. Rhydian Jones, motoring expert at Confused.com car insurance offers tips to help drivers make further savings.
Car insurance prices have seen the biggest annual drop in more than 10 years, bringing good news to drivers. The average cost of car insurance in the UK has fallen by £161 (-16%) in the past 12 months. This is the biggest monetary annual decrease on record.
Drivers can now expect to pay £834 for their car insurance, on average. This is the cheapest price recorded in 18 months.
That’s according to the latest car insurance price index by Confused.com, powered by WTW. Based on more than 6 million quotes, it’s the most comprehensive car insurance price index in the UK for new policies.
This signals a U-turn in car insurance pricing. This is the second quarter prices have dropped year-on-year, following more than 2 years of steep increases and record-high prices. However, this past quarter (Q4 2024), prices have shifted significantly. This means drivers could be seeing even greater savings when they’re shopping around and buying new policies.
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. 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.com1. However, evidence shows that shopping around at renewal meant drivers made savings of £71 last quarter, on average1.
Most drivers across the UK are benefitting from cheaper insurance prices when shopping around. However, some are seeing even greater savings than others.
Drivers will have also seen a significant drop in prices, depending on their age, with some now paying 18% less compared to 12 months ago. For some, this is more than a £200 saving compared to last year. However, for 18-year-olds in particular, this equates to a staggering £557 decrease year-on-year. This means drivers in this age group are now paying £2,605 for their car insurance.
Similarly, 20-year-olds are now paying 18% less compared to this time last year. This is a £467 saving in 12 months, meaning the average premium is now £2,061. And 17-year-olds are now paying £473 (-16%) less, at £2,404, on average.
These are still significantly high prices, and higher than any other age group. But with the recent price drops they could be starting to see more savings if they continue to shop around. In fact, in the past 3 months alone prices have shifted significantly for these drivers, and more so than any other age group. Prices for 17-year-olds in particular have dropped by £323 (-12%) in 3 months, on average.
Similarly, price drops will vary depending on where a driver lives too. In particular, those in Manchester and Merseyside, and Inner London are now paying 19% less for their insurance, compared to this time last year. In Manchester and Merseyside, this equates to a £235 drop in prices. This brings the average premium in the region to £998, and it’s the first time drivers have paid less than £1,000 on average in 18 months. Meanwhile, drivers in Inner London are now paying £299 less year-on-year, with the average premium in the region now £1,308.
Despite a drop in prices, drivers in Outer London and the West Midlands are still paying upwards of £1,000 for their car insurance, on average. Premiums in the region are now £1,072 and £1,015 respectively, on average, but are still more than £200 cheaper compared to last year.
While it may come as good news to drivers that prices are starting to fall, premiums are still a lot higher than they have been in the past. In fact, the average UK premium is 33% higher compared to 2 years ago. And the research shows that more than a third (36%) of UK drivers believe their car insurance is more expensive now than it has ever been. This has caused many drivers to take extra measures to be able to afford their insurance. Almost 1 in 5 (19%) have had to take money out of their savings to pay for their policy. Meanwhile more than 1 in 7 (15%) have had to cut back on personal spending. Many have also had to rethink how they pay for their insurance.With 1 in 10 (10%) switching to pay monthly to make it more affordable, and taking the hit on the extra interest charges.
However, while insurance pricing is primarily based on a driver’s risk of making a claim, reassessing their driving habits can reduce this risk. This means drivers could cut back on how much they’re paying. For example:
- Check your mileage: It’s important that you’re honest with how much you drive. If you’ve overestimated your annual mileage, you could be paying more than you need to. How often you’re driving indicates your likelihood of making a claim, so if you’re driving less, make sure to let your insurer know.
- Increase security: Wheel locks may not look pretty, but they can prevent your car from being stolen. Adding an alarm device or parking in a well-lit area are also likely to deter thieves or opportunists.
- Consider named drivers: If someone else is likely to use your car from time to time then adding them as a named driver could save some money. Especially if they have a higher no-claims bonus and more driving experience. This is because the risk of a claim is spread across more drivers, and could be considered lower.
Confused.com has compiled more information on how to save money on car insurance, including when is the best time to buy.
Rhydian Jones, motoring expert at Confused.com car insurance comments, “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.
“But your price will depend on your level of risk. Looking at how you could potentially reduce your risk of a claim can help to save money on your policy. This includes things like reassessing how often you use your car, and updating your policy to reflect this. For example, overestimating your mileage can mean you’re paying more than you need to. And if you can, make your car more secure - the less chance of it being stolen, the lower risk you are.
“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. Even if your renewal price seems fair, there’s a chance that there’s another insurer out there willing to offer you a better price. 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.”
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