Car insurance prices at lowest point in 3 years - But drivers warned of increases looming

• The average cost of car insurance in the UK has dropped by £66 in the past 12 months, to £711.
• However, prices have increased for some drivers in the past 3 months.
• Falkirk has seen the biggest price increase in the past 3 months, of 6%, or £33, on average.
• Meanwhile prices for drives aged 70 and above have increased as much as £13 (3%) in the past 3 months, on average.
• Confused.com experts offer tips to help drivers cut insurance costs by shopping around as other motoring expenses rise this year.

A drop in car insurance prices puts premiums at the lowest point recorded in almost 3 years. However data shows that price increases could be on the horizon, as some drivers see prices creep up in recent months.

As such, drivers are being urged to shop around and lock in now, while prices remain low. That’s as the average cost of car insurance in the UK is now £711 - the lowest price recorded in almost 3 years. This is a £66 (-9%) decrease compared to 12 months ago. However, data suggests price drops have slowed in the past 3 months, even increasing for some demographics.

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 for new premiums in the UK.

In the past 3 months, prices for 49 and 70-year-olds and those aged 71 and over, have started to increase, by £12 (2%), £13 (3%) and £9 (2%) respectively, on average. Similarly, prices in some areas of the UK are higher now compared to 3 months ago. In particular, Northern Ireland, Falkirk and Chelmsford are seeing the biggest increases, of £41 (5%), £33 (6%) and £16 (3%), on average.

While these changes may not be seen when drivers shop around just yet, it does spark concern for drivers, who could soon see their insurance prices increase when it comes to shopping around.

Car insurance costs have been steadily decreasing year-on-year for 18 months, dropping as much as 17% at the start of last year. However, in the past 12 months, prices have only decreased by 9%, which is the smallest change in prices reported in more than 12 months.

But, for the time being, prices are still lower for those shopping around, compared to 12 months ago.

According to the data, some drivers are seeing significant savings - especially younger drivers. In particular, 17-year-olds are now paying 23% less, equivalent to £517, compared to drivers of the same age, 12 months ago. This brings the average price paid by drivers of this age to £1,741. Similarly, 18-year-olds are facing lower premiums compared to last year, at £2,082, on average. This is a 15%, or £352, decrease compared to 12 months ago.

Although young drivers can see big savings when they shop around, they are still paying high prices for their insurance, and premiums remain considerably higher than in recent years. That’s as the data shows that prices for young drivers are as much as 44% more expensive compared to 5 years ago.

Change in premiums by age, Feb 2026

However, data shows that prices for some age groups are starting to somewhat stabilise, seeing minimal changes year-on-year. Those aged 70 have only seen a 2%, or £8, decrease compared to last year. Similarly, drivers in their mid-20s are seeing very little change to premiums. 23-year-olds are now only paying 3%, equivalent to £46, less compared to last year. This decrease is slightly greater for 25-year-olds, who are now paying 6%, or £78, less compared to 12 months ago.

It’s a similar picture across different regions of the UK, with some benefitting more so than others from the recent drop in prices. Drivers in Manchester and Merseyside have seen the biggest drop in prices, of 14%, equivalent to £132, year-on-year, on average. This means drivers in the region can now expect to pay £804, on average. This is the lowest price in the region for more than 3 years.

South Wales follows, having seen an 11%, or £68, drop in prices compared to last year. This puts the average premium in the region at £547.

Change in premiums by region

Meanwhile, despite prices dropping significantly in Inner London, it’s still the most expensive area in the UK for car insurance. Although, with premiums now £1,093 - this is the closest they have been to £1,000 since the end of 2022.

Northern Ireland bucks the trend of declining annual prices, as the only area in the UK to see an increase in prices in the past 12 months. Here, drivers are now paying £947, on average - a £114, or 14% increase year-on-year. This means prices in the region are now the most expensive they have been in almost 2 years.

This reported drop in prices may come as good news to drivers, as costs in other areas of motoring are set to rise - shifting the financial burden elsewhere. Fuel prices are reportedly rising rapidly due to the instability driven by conflicts around the world, meaning drivers are facing higher prices at the pumps.

However, from September, the freeze on fuel duty, which is currently capped at 5p, is set to be reversed¹. This means fuel duty will rise each year with inflation, making it more expensive to fill up at the pump.

Another price increase drivers could expect in 2026 very soon is an increase in vehicle excise duty rates (VED), which is expected to rise from April this year in line with inflation², which will also impact EV drivers³.

While drivers who shop around are seeing their premiums drop, renewing customers aren’t seeing the same savings. That’s because new research of 2,000 UK drivers⁴ found that almost 2 in 5 (39%) received a more expensive renewal price from their insurer in the past 3 months, of £68, on average.

Of these, almost half (46%) shopped around and switched insurers, saving £72, on average. In comparison, almost a third (32%) of drivers had a cheaper renewal price. But nearly 1 in 4 (24%) still decided to shop around and switch,also saving £72, on average.

But despite prices dropping and saving drivers money, prices are still 32% higher compared to 5 years ago. This means some drivers are likely paying more today than they have ever done before, putting additional pressure on their finances.

In fact, almost half (45%) claim they’ve had to make a financial sacrifice, such as using savings or cutting back on personal spending, to pay for their car insurance. And 1 in 5 (20%) consider car insurance to be one of their biggest household outgoings.

It’s clear that shopping around is the key to saving money on car insurance. Although, worryingly, many drivers could be missing out on even better savings. According to the research, drivers typically shop around 19 days before their renewal is due, and hold off buying until 10 days before, on average.

But new data finds that running a quote 28 days before your renewal is due could be the key to getting the best price⁵. Confused.com car insurance data shows that buying car insurance around 28 days before renewal could be 51% cheaper than buying on the renewal day.

Shopping around early isn’t the only way drivers could save money on their car insurance. Experts at Confused.com offer more tips to help drivers cut costs even further:

• Check your mileage: telling your insurer you only drive 4,000 miles a year to get a cheaper price doesn’t just put you at risk of invalidating your insurance- it could cost you more. On average, drivers covering around 4,000 miles a year pay £772 for their car insurance, compared to £594 for those who drive 12,000 miles. Driving more miles per year can suggest greater experience behind the wheel, which insurers may view as a lower risk. Lower mileage can sometimes indicate less regular driving experience and therefore a higher risk of making a claim.
• Share the driving: If you live with a partner, parent or child who could benefit from using your car from time to time, add them to the insurance. Data shows that those who are the sole driver on a car pay £805 for their insurance, vs. £687 paid for those who have an additional named driver. But don’t lie, if you’re not sharing the car, don’t declare it.
• Enhance your security: Simply put, the harder your car is to steal, the less of a risk it is. And this could mean you get cheaper car insurance. While most cars come with immobiliser and alarm as standard, adding things like a wheel lock or tracking device could save you money. Also consider where your car is parked, especially at night. Opt for a well-lit area if you can. Driveways and residential parking areas generally seem to be considered a lower risk. While those who park in a road away from their home pay as much as 80% more, on average.

For more tips on how to save on car insurance, visit: www.confused.com/compare-car-insurance/tips-for-cheaper-car-insurance

Matt Crole-Rees, motoring expert at Confused.com car insurance comments, “Car insurance prices are at the lowest they’ve been for a while - but data also shows prices are creeping up for some drivers, and stalling for others. And this could mean price increases are on the horizon.

“This, alongside fuel and tax costs increasing this year, will mean more financial pressure for drivers. So any further savings you can make on your insurance now will be hugely beneficial in the long term.

“And this is why it’s more important than ever to shop around, not only to lock in the best price now, but to ensure you are getting the best deal. The biggest thing to consider is when you shop around. Leaving it until the last minute can in fact mean you pay more. Our data shows that 28 days is the ‘sweet spot’ for when drivers typically pay the least for their insurance. So being organised and getting it sorted early can pay off.”

- ENDS -

Notes to editors