Car insurance premiums have dropped by an average of £217 over the past two years, providing a significant cost of living boost for drivers. According to Compare the Market, the average premium stood at £593 in June, down from £810 in June 2024 – a fall of 26 per cent.
Prices are also lower than they were last June, when the average premium was £636. This means drivers are now paying close to some of the lowest prices seen in over two years, according to the comparison site.
Regional variations in premium drops
London and the North West of England have experienced the biggest reductions, with premiums falling by 31 per cent over the two-year period. East Anglia saw a 28 per cent drop, from £774 to £552, while almost every part of the UK has seen insurance costs fall since June 2024.
Drivers aged between 65 and 79 pay an average of just £338, the lowest of any age group. In contrast, motorists aged over 80 saw the smallest cash reduction, with their average premium falling by £100 to £545.
Younger drivers still face highest bills
Drivers aged between 16 and 24 are paying £494 less on average than they were two years ago, a 27 per cent fall. However, they still face by far the highest insurance bills, with the average premium standing at £1,314.
Sam Wilson, insurance expert at Compare the Market, said: "Our research shows that motorists comparing quotes through Compare the Market are seeing lower insurance costs than they were two years ago. Premiums have fallen significantly over that period, with many drivers now paying close to some of the lowest prices we've seen in over two years."
Future outlook and advice for drivers
Wilson warned that prices could start rising again due to recent inflationary pressures, "so drivers shouldn't assume costs will keep falling". He advised drivers to consider shopping around for a cheaper deal when their policy comes up for renewal.
Drivers can also reduce their premiums by checking their car's insurance group before buying, as some models cost more to insure than others. The less likely you are to make a claim, the cheaper your premium is likely to be.
