UK Car Insurance Premiums Fall Sharply In Biggest Annual Drop For A Decade

Comprehensive car insurance premiums in the UK have fallen by 16% over the past year, marking the largest annual decrease in more than a decade, according to the latest Confused.com Car Insurance Price Index, produced in partnership with WTW.

By the fourth quarter of 2024, the average premium had dropped to £834, representing a £161 reduction compared with the previous year. The fall follows two years of steady price rises between 2021 and 2023. Premiums have now declined for four consecutive quarters, with reductions of 5% in Q1 (£54), 6% in Q2 (£59) and 2% in Q3 (£27).

Price cuts were recorded across every region of the UK, with all areas seeing annual decreases of more than 10%. Manchester and Merseyside experienced the steepest drop, with premiums falling by 19% (£235), bringing the average cost down to £998 — the first time it has dipped below £1,000 in 18 months. Inner London also saw a near 19% reduction, with premiums falling by £299 from £1,607 to £1,308.

At the other end of the scale, drivers in the Scottish Borders recorded the smallest annual decline at 10%, with premiums now averaging £590. South West England remains the cheapest region overall, with an average premium of £558. Inner London continues to be the most expensive region, while the West Midlands has overtaken Manchester and Merseyside as the priciest area outside the capital, despite a 17% drop bringing the average cost to £1,015.

Localised data also revealed notable shifts; for example, in Oldham, premiums fell by 21% (£291), with the average now at £1,065. Meanwhile, West Central London remains the most expensive postcode, with drivers paying £1,731 on average, even after an 11% (£205) reduction.

Younger motorists saw the biggest improvements. Premiums for 18-year-olds fell by 18% (£557), bringing the average cost to £2,605. Drivers aged 20 also benefited from an 18% reduction (£467), with premiums now averaging £2,061, while older drivers experienced smaller declines, with 51-year-olds seeing a 12% drop (£97), taking their average premium to £699.

Tim Rourke, UK head of P&C pricing, product, claims, and underwriting at WTW, said: “Lower levels of inflation and sustained reduced motor claims frequency in 2024 allowed insurers to continue to drop rates for consumers, who have endured dramatic rises since the pandemic.”

Steve Dukes, CEO at Confused.com, said: “New policy prices have been decreasing steadily for 12 months, and we’re now seeing a significant shift in prices compared to last year. We’re also seeing significantly different approaches between insurers, which means for customers it’s a great time to be shopping around and for ambitious insurers it’s an opportunity to grow.”