Car insurance prices hit a 2-year low, and younger drivers save most
The average cost of car insurance has fallen by more than £160 over the past year
Car insurance premiums have fallen by over a fifth to a two-year low. Experts are pointing to lower levels of inflation than in recent times, as well as a decline in the number of claims, as the cause.
According to price comparison site, Compare the Market, the average car insurance premium is now £600 – £162 less than this time last year and almost £200 cheaper than in 2023.
It’s younger drivers who are seeing the greatest changes as the average premium for under 25s has dropped by a whopping £425 over the last year to £1,336. Those aged between 65 to 79 have only seen an average dip of £63, or 16 per cent, as opposed to the 25 per cent drop enjoyed by fresher-faced motorists.
Age isn’t the only factor affecting car insurance prices; insurance premiums continue to vary wildly depending on where you live. Yorkshire and the Humber remains the most expensive place to insure your car, with the average premium having dropped by £361 over the last year to £1,221. Wales sees the cheapest insurance prices in the UK at a mean of £499 (down from £616), but all areas of the country have seen the cost of cover fall.
These new, lower prices come as part of a slow decline in car insurance premiums since their peak in late 2023/24. In fact, the average cost of motor insurance is now just two-thirds of the price of what it was then. Experts continue to suggest the main reasons for such a large fall is low, steady inflation, which is helpful in the process of ascertaining risk and repair costs, as well as fewer claims being submitted.
Amy Roothamis an insurance expert at Compare the Market. She said that: “Many motorists will be delighted that the cost of car insurance is continuing to fall. Drivers should look to take advantage of this by shopping around for a cheaper deal when their policy ends. Choosing to auto-renew a policy may lead to motorists missing out on substantial savings.”
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