The cost of car insurance has declined by £194 (25%) in the last two years, with the typical premium now standing at £600
Premiums have fallen faster for younger drivers, those aged between 16 and 24 could benefit from up to a 25% decrease in car insurance costs in the past year
More than half of drivers could save up to £473 on their car insurance by shopping around through Compare the Market
6ht October 2025 – The cost of car insurance has fallen by a quarter to a two-year low, according to new Premium Drivers research from Compare the Market.
The average premium declined by 22% year-on-year, to £600 in August 2025 compared to £762 in August 2024 – marking a decrease in price of £162. This is the lowest that car insurance premiums have been since October 2022, when premiums were £589. The average premium has also fallen across the last four months by £53 from May 2025.
The continued drop in average premiums may in part be due to lower levels of inflation putting pressure on insurers, as well as a fall in the level of motor claims. As a result of the decline, the cost of car insurance is, on average, £351 cheaper than in November 2023 when the average premium peaked at £951.
Compare the Market: Average cost of car insurance
August 23 | August 24 | August 25 | Change (year-on-year) | |
|---|---|---|---|---|
Average Premium | £794 | £762 | £600 | £162 (22%) |
All age-ranges have benefited from falling premiums, with the typical premium for a driver aged between 65 and 79 falling by £63, from £388 in August 2024 to £325 in August 2025. Motorists aged between 16 and 24 have seen a larger decrease of £425 in the cost of car insurance on average, from £1,761 to £1,336.
Compare the Market: Average car insurance premiums by age
Under 25 | 25-34 | 35-44 | 45-54 | 55-64 | 65-79 | 80+ | |
|---|---|---|---|---|---|---|---|
Aug-24 | £1,761 | £811 | £628 | £513 | £400 | £388 | £641 |
Aug-25 | £1,336 | £665 | 517£ | £433 | £335 | £325 | £514 |
Change | -£463 | -£146 | -£111 | -£80 | -£65 | -£63 | -£127 |
Across the UK, drivers in Yorkshire and The Humber have seen the steepest fall in average car insurance premiums – down by £361 year-on-year. Despite this, motorists in the region typically pay the most for car insurance currently at £1,221. Drivers in the South West have only seen the average cost of car insurance fall by £91 from the previous year, but the current average premium was the cheapest in the country at only £463.
Compare the Market: Average car insurance premiums by area
Region | August 24 | August 25 | Change (£) |
|---|---|---|---|
East Anglia | £718 | £549 | -£169 |
East Midlands | £713 | £558 | -£155 |
West Midlands | £918 | £717 | -£201 |
East of England | £769 | £600 | -£169 |
London | £1,267 | £1,035 | -£232 |
Greater London | £1,233 | £947 | -£286 |
North East | £662 | £529 | -£133 |
North West | £869 | £663 | -£206 |
South East | £668 | £528 | -£140 |
South West | £554 | £463 | -£91 |
Yorkshire and the Humber | £1,582 | £1,221 | -£361 |
Northern Ireland | £721 | £622 | -£99 |
Scotland | £632 | £527 | -£105 |
Wales | £616 | £499 | -£117 |
Drivers looking to make the most of continued falling premiums should consider shopping around for a cheaper deal when their policy comes up for renewal. Motorists could save up to £473 on their car insurance through Compare the Market.
Amy Rootham, Insurance Expert at Compare the Market, comments:
"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.”
For further tips on how to save money on car insurance, visit:
https://www.comparethemarket.com/car-insurance/content/cheapest-car-insurance-deals/
Notes to editors
Up to £473: Based on Online independent research by Consumer Intelligence during June 2025, 51% of customers could achieve this saving on their car insurance through Compare the Market.
