Comprehensive car insurance premiums in the UK have declined by 16% over the past 12 months, representing a drop of £144, according to the latest Confused.com Car Insurance Price Index, produced in partnership with WTW.
The average premium now stands at £757, marking the lowest point in two years and continuing a downward trend that began 18 months ago.
The data show a total decrease of £238, or 24%, from the peak of £995 in December 2023. Over the last quarter, average premiums have also declined by 3% (£20), down from £777.
Comparing annual figures, average premiums in May 2024 were £901. By May 2025, this had decreased to £757. This corresponds to a 16% drop, reversing the 22% annual increase recorded the year before.
Tim Rourke (pictured above), UK head of P&C pricing, product, claims and underwriting at WTW, said average premiums are continuing to fall from their 2023 peak despite increasing pressures from theft and vehicle repair costs.
“The current trend of market consolidation and fear of losing scale to a handful of mega-insurers will be a key driver as insurers continue to drop rates in order to remain competitive and maintain critical mass, despite pressure on margins likely to persist throughout 2025,” Rourke said.
Commentary from pricing intelligence firm Pearson Ham Group supports the broader trend but adds that the pace of reduction appears to be moderating. The firm’s latest data highlights signs of stabilisation in parts of the market, suggesting that while premiums remain on a downward trajectory, the rate of decline may begin to ease.
The data indicate that younger drivers experienced the steepest reductions. Drivers aged 17 saw the largest decrease in more than a decade, with premiums dropping 27%, or £775, from £2,826 to £2,051.
Those aged 18 and 19 saw reductions of 23% and 21% respectively, with premiums falling to £2,329 and £2,002. The most marginal annual change was recorded among male drivers aged 21 to 25, who experienced a 12% decrease, equating to £219, with average premiums now at £1,864.
Meanwhile, separate data shows that January 2025 saw the sharpest monthly drop in premiums since May 2024, falling by 2.4%. Over the 12-month period to January, average prices declined 18.2%, reinforcing the longer-term trend highlighted in the Confused.com/WTW index.
All UK regions recorded declines in average prices over the year. The West Midlands saw the highest percentage decrease at 18%, down £201 from £1,110 to £909. Despite this fall, the region remains the most expensive area outside London. Manchester and Merseyside followed closely with a drop of just under 18%, equating to a £192 reduction, bringing average premiums to £896.
According to recent ABI figures, insurers have reported a reduction in average private car premiums to £589 in Q1 2025, a 5% decrease from the £621 recorded in Q4 2024. However, despite falling premiums, the cost burden on insurers continues to rise, with total motor claims payouts reaching £11.7 billion in 2024 – up 17% from the previous year. This ongoing imbalance may affect the sustainability of further premium reductions.
Northern Ireland recorded the smallest annual fall, at 9% or £87, with average premiums now at £852. South West England remains the lowest-cost region, where average premiums stand at £515. Central and North Wales follow, with average annual premiums of £524.
Among major urban areas, Inner London remains the most expensive, with average premiums falling from £1,418 to £1,185. Outer London saw premiums decrease to £967 from £1,168. Leeds and Sheffield recorded a 17% drop from £1,025 to £854.
On a more localised scale, West Central London — the highest-priced postcode in the UK — saw the sharpest annual fall in premiums. Prices in the area declined by 24%, or £446, from £1,856 to £1,410. In Oldham, drivers paid £250 less on average than they did in May 2024, a 21% decrease.
Llandrindod Wells continues to be the cheapest location for car insurance, with average annual premiums of £481. It has now been joined by three other towns with average premiums under £500: Dorchester (£496), Exeter (£496) and Torquay (£497).
Steve Dukes, CEO at Confused.com said that the downward trend in car insurance premiums has persisted for nearly 18 months.
“Insurers are using data to gain a better understanding of customer risk, reducing price to remain competitive in the key target segments most important to them,” Dukes said.
Dukes also said that premiums remain significantly higher than five years ago, suggesting that insurers need to address the underlying costs of providing coverage, with a focus on efficiency and customer service through the use of technology and data.
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