Has car insurance gone up in 2025?

According to the latest car insurance prices report by Confused.com, the average cost of car insurance in the UK is now £735. That's the lowest it's been in the UK in more than 2 years.

The latest figures show that the price of car insurance has now dropped by £136 (-16%) over the past 12 months, on average. 

Prices have been gradually falling since the beginning of 2024, but prices are still 25% more expensive compared to almost 3 years ago.

Are car insurance costs falling?

Yes! Car insurance costs have gradually fallen across the board since the beginning of 2024 after reaching a record of £995, on average, at the end of 2023. The average price of a new policy is now more than £136 cheaper compared to 12 months ago. 

A number of factors slowly caused the cost of car insurance to rise following the COVID-19 pandemic. The price of repairs and car parts has soared in recent years alongside the rise in UK inflation. But, for at least 18 months, the tide has started to turn with growing competition between insurers and a stabilisation in claim cost. This has resulted in a continued trend of declining car insurance costs.

Why is my car insurance still expensive?

'You say car insurance costs are falling, but it doesn't look like that to me!'

It's a fair point, but it's something that can be explained.

Despite the recent decline of car insurance costs, it's not uncommon for some motorists to face price increases at renewal. More than 2 in 5 (42%) of UK drivers who received their renewal in the past 3 months saw their price increase by £81, on average. Of the drivers who were quoted a higher premium at renewal, 2 in 5 (40%) used a price comparison site and switched insurers, saving £91 on average.

When it comes to renewal, less than 1 in 4 (24%) received a cheaper renewal price. Of the drivers to receive a cheaper renewal quote, the average saving was £53 compared to the previous year. Despite potentially saving money on their renewal, more than 2 in 5 (42%) of these drivers decided to shop around and switch. This resulted in an even greater saving of £83, on average.

It proves just how important it can be to shop around before renewing a car insurance policy. 

So, what do these factors look like?

Personal reasons

Premiums may be falling overall, but your personal circumstances still have a bearing on the prices you're quoted. Here are some factors that might affect your premium:

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

Change in job title: Your occupation can have a bearing on your car insurance cost. Some jobs are seen as riskier than others, especially if you commute to work by driving your car.

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

Other external reasons

There are other external reasons out of your control that can cause car insurance prices to rise across the board. These include:

Inflation: The rise of inflation in the UK has seen the cost of parts and labour soar. In turn, it costs 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?

If we look back over the past 5 years, the COVID-19 pandemic and rise in UK inflation have had a significant impact on the cost of car insurance. Prices began to rise significantly as more people got behind the wheel when COVID-19 restrictions were lifted. Coinciding with the cost of living crisis, car insurance prices began to soar in 2022 and 2023.

The average cost of car insurance in the UK reached a record of £995 in Q4 of 2023. But since that point, costs have gradually declined through healthy competition between insurers.

Male drivers pay more than women

Car insurance costs are continuing to fall for all drivers regardless of gender. However, men generally pay more. Male drivers pay £791, on average. This is down 16% (£148) compared to 12 months ago. Whereas women pay £642, on average, this has dropped by 18% (£144) compared to 12 months ago.

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

These factors contribute to a £149 gender gap in car insurance costs between men and women, on average. 

Respite for younger drivers

Despite paying significantly more for car insurance than other age groups, young drivers are benefitting from the greatest savings.

According to the latest car insurance price report by Confused.com, 18-year-olds now pay £569 (20%) less compared to 12 months ago. This means drivers of this age are now paying £2,342, on average.

17-year-olds are also benefitting from significant savings, with prices now £780 (28%) cheaper than last year. This means drivers of this age are now paying £2,008, on average

Why are prices falling for young drivers in particular? On a broader level, fewer claims mean fewer payouts. In turn, insurers adjust their premiums accordingly. Also, newer cars are adopting more safety technology, which means they're less likely to be involved in accidents or at a lower risk of theft.

A key reason for these savings is a shift in the number of young drivers opting for telematics policies. Relative inexperience on the road counts against the 17-20 age group when it comes to car insurance prices. But telematics policies can help combat sky-high costs.

How? These devices track a driver’s habits and driving patterns to calculate a more accurate price. In short, safer driving brings down the cost of car insurance.

Other costs still high

Despite falling car insurance premiums, the overall cost of running a car isn't always cheap.

In general, the cost of repairs and parts is increasing as vehicles become more technologically advanced. The more it costs to manufacture specialist parts, the greater the cost is to motorists.

However, the cost of fuel has gradually fallen.

If you want to find the cheapest petrol or diesel prices near you, you can use our fuel price tool.

Petrol now costs £1.35 per litre, and diesel costs £1.42, on average (prices correct as of 16 September 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 instalments. 

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 are at the lowest in more than 2 years. And this means if you’re due to renew soon, then you’re likely to see great savings when shopping around. But we also know that those renewing may not see the same savings. This is why it’s important to take a note of your renewal price, and shop around to see if you can do better.

“It’s important to take advantage of prices when they’re dropping. The cost of motoring is still very high, so any savings made can help you elsewhere - whether that’s money in your savings, or towards other living costs. And shopping around 3 weeks before your renewal is due could be the best time to get the lowest price.”

Rhydian Jones Commercial Director & Motoring Expert