Millions of motorists are benefitting from cheaper insurance – but the research also shows those who stick with the same provider might actually be stung with a rise
The cost of car insurance has tumbled to a more than two year low, welcome figures have revealed.
Motorists have got used to seeing their annual premiums spiral in recent years, especially in the wake of the Covid crisis. It was just another hit in the cost of living crisis.
But it seems like we have turned a corner, with prices well and truly heading in the right direction. Data from price comparison website Confused.com, along with WTW, found drivers can now expect to pay an average of £757 a year for their car insurance.
This is a £144 – 16% – less than a year ago. The figures are based on more than six million quotes. At the end of 2023, the average premium was £995 – the highest recorded by the Confused.com car insurance price index.
This means prices have fallen by £238 in just 18 months. Younger drivers – who typically have the highest premiums – are now benefitting from the biggest savings.
According to to the research, the average 17-year-old will still be shelling out £2,051 a year for insurance. But that is £775 – around 27% – less than 12 months ago. It is the biggest yearly drop for this age group in more than a decade.
It is not just younger drivers who are seeing a significant fall in prices. According to the index, a typical 46-year-old has bagged a prices drop of £154 – 18%. This brings the average price for drivers of this age to £688.
Not that everyone will have seen prices fall. If you’ve had your renewable quote and it’s gone then you are not alone. Research shows not all drivers are seeing these savings at renewal – especially those staying with the same insurer.
Nearly half of UK drivers claim their renewal price has increased in the past 12 months. Those who faced higher renewal prices said they were being asked to shell out an average £79 more than last year. Meanwhile, those who were offered a cheaper renewal price said it was only £57 less than the year before.
The disparity highlights the importance of shopping around before you go with a quote. Rhydian Jones, motoring expert at Confused.com, said: “Car insurance prices have been dropping for some time now – and this is great news for those who are due to renew soon.
“Our latest data shows that the cost of a new policy, on average, is £144 cheaper compared to last year. But some customers aren’t seeing the same savings in their renewal price from their insurer.
“When it comes to your renewal, your premium price might go down – or it might stay about the same. But as average prices drop, insurers can become more competitive, which means you could get a cheaper price elsewhere. It’s important not to just stick with a price because it looks good – you could be missing out on a lot of money.”
Save money on your car insurance
Confused.com has produced some tips on getting the best savings.
Shop around early
Research shows most drivers look to renew their car insurance about 15 days on average before it runs out. But further data shows that the sweet spot to get the best price is around three weeks before renewal. So, getting a quote just that little more in advance could help you find a better deal.
Be accurate with your mileage
Trying to lower your premium by underestimating your mileage can actually cost more. For example, drivers who report 5,000 miles per year pay an average of £809, while those driving 10,000 miles are paying an average of £746. Always be honest about your mileage when taking out insurance. If you exceed your annual mileage, you could risk invalidating your policy.
Consider sharing the driving
Adding a named driver to your policy, especially one with more experience, could help save money on your insurance. Data shows that those listed as the sole driver on their policy pay an average of £853 for car insurance. In comparison, those with an additional driver pay £735. The savings can be even cheaper if the additional driver is a spouse, with average premiums dropping to £534, on average.
However, if you’re adding a named driver to your policy, it’s important to ensure that the policy holder is the main driver of the car – not the named drivers. Having a named driver as the main driver is a form of insurance fraud, called fronting, and can carry serious consequences.
