Car insurance prices see dramatic fall, but younger drivers see the biggest savings

Car insurance prices have fallen to their lowest point in almost two years, but in a surprising twist it’s the youngest drivers that are benefitting more than their elder counterparts.

According to data from price comparison site, Compare the Market, the average car insurance premium dipped by almost a quarter (23 per cent) annually from £950 in December 2023 to £729 in 2024, marking a mean saving of around £220.

However, this drop in insurance prices is not equal across the board. For example, while premiums for drivers aged over 55 dropped by an average of £62 or around 12 per cent, those under 25 saw an average saving of £425, which equates to a drop in excess of 20 per cent.

Of course, it’s worth keeping in mind that insurance premiums for younger drivers still remain markedly higher than for older motorists, averaging at £1,577 compared to £427 for over 55s.

Age isn’t the only factor dictating how much drivers are saving, though, because Compare the Market’s data also shows a stark difference between those living in England and people living in Scotland or Wales. Londoners, for example, saw their car insurance drop by an average of £370 year-on-year, compared to £62 for someone in Wales and £111 for someone in Scotland. 

Regardless, Julie Daniels, Compare the Market’s car insurance expert, welcomed the figures, saying that “many motorists will be delighted that the cost of car insurance has declined significantly compared to last year” and encouraged drivers coming up for renewal to shop around in order to get the best price.

This remains important because while car insurance prices have dropped significantly, they’re still up by an average of £105 (roughly 17 per cent) in the same period in 2022. Premiums previously shot up significantly throughout 2023, with insurers pointing to a rise in the number of claims and the significant expense of maintaining and repairing cutting-edge electric cars.

As more and more people choose to go electric, many are worried that insurance premiums will continue to begin inflating once again. However, the UK’s new Vehicle Risk Rating system is hoped to neuter this somewhat; with the first few cars under this new scheme set to filter out to the public in the next few months, the new system will rate cars across five elements: performance, damageability, repairability, safety and security. This, it’s hoped, should give insurers better insight and understanding of the risk of covering a certain car, with the potential to reduce premiums for many.

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