• Increase in price competition for under 25s insurance could be driven by rise of Telematics policies - now the cheapest option for 49% of young drivers
  • Prices for young drivers could start to fall, as competition for under 25s insurance picks up
  • Difference between “shop around” and “auto-renewal” for all other age groups quotes grown to £97.95 over last quarter – the highest point in the year

Despite a trend of rising premiums, comparethemarket.com’s latest motor insurance data indicates that there may be light at the end of the tunnel for young drivers – although the picture is less rosy for all other age groups.

In its latest Premium Drivers report, comparethemarket.com highlights that heightened competition levels for under-25s, could lead to falling prices. However, for all other age groups, competition is decreasing suggesting that premiums will continue to rise, as they have done over the past year.

The ‘savings variable’, comparethemarket.com’s gauge of price competition which tracks the difference between the cheapest premium in the market and the market average, has fallen for young drivers by 2%, or nearly 10% in relative change, over the past year; for all other age groups, the ‘savings variable’ has risen by over 8% in relative percentage terms since August 2014.






August 2014

August 2015


Relative Percentage Difference

Drivers under 25





Drivers over 25





Simon McCulloch, Director of Insurance, comparethemarket.com comments: “After a period of steadily increasing premiums across all age groups, we are now seeing a divide emerging between younger and more experienced drivers in car insurance costs, and not in the way you might expect. If price competition continues to be high for young drivers’ policies, we may in fact see premiums start to decline for under 25s whilst they rise for everyone else. This will particularly be the case if telematics policies continue their rise in popularity and price competitiveness. Telematics policies give younger motorists the chance to prove they are a good risk for insurers, pushing down premiums for the best drivers. Hopefully, this will also lead to safer driving habits and cheaper premiums too.”

According to comparethemarket.com data;

  • Over three quarters (77%) of under 25 year olds see at least one telematics premium in their cheapest five quotes – up from 62% last year.
  • Furthermore, telematics policies are now the cheapest option for almost half (49%) of under 25s – up from 30% last year. This indicates that telematics policies are becoming increasingly commonplace and competitively priced, which may be helping to drive up competition in this age group.

For the over 25s however, the story is markedly different;

  • Year on year, the savings variable has expanded by over 8% in relative percentage terms, growing from 11.8% to 12.8%

Despite summertime ordinarily being a ‘hot season’ for price competition, this year competition has actually decreased through the summer months. Consequently, the price difference between the cheapest and average premium, which comparethemarket.com equates to being the difference between ‘shop around’ and ‘auto-renewal’ price, has grown to £97.95 over the past quarter – its highest point in the year. This lack of competition is easing pressure on insurers, which is leading to steadily rising premiums across the board, and particularly for over 25s.

  • The average cheapest premium in August 2015, across all age groups, came to £517.73, up £75 on August 2014 (£441.90).
  • Critically, prices are going up faster for average, or ‘auto-renewal’, premiums than they are for cheapest, or ‘shop around’, with average premiums rising by £27.50 over the quarter as opposed to £23.96 for cheapest premiums. [See chart below]

Simon McCulloch continued: “Those hit hardest by rising premiums are always those who choose not to shop around for the best price. The savings variable is the difference between the cheapest - or ‘shop around’ - and the average - or ‘auto-renewal’ – price. This gap is widening and is significantly larger than the previous two years. The message is clear – if you auto-renew you are likely to be paying significantly over the odds, so it’s more important than ever to shop around for your motor insurance each year.”



All data is sourced from comparethemarket.com.

Premium Drivers tracks the “savings variable”, which is the difference between the average and the cheapest motor premium prices across all age groups. This measure gives an indication of the level of price competition currently associated with motor insurance premiums.

When the average price is referred to, this is the mean average of the top five cheapest prices presented to a customer, where a consumer has clicked through to buy. Buying from the top five cheapest prices presented represents 90% of all car insurance sales.

When the cheapest price is referred to, this is the average cheapest price presented, where a customer has clicked through to buy.

All premium data refers to motor insurance products featuring either comprehensive, third party fire and theft or third party cover.

About comparethemarket.com

comparethemarket.com was launched in 2006 and has grown rapidly over the past nine years to become one of the UK’s leading price comparison websites. 

comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as, credit cards and loans.

comparethemarket.com actively selects its brand partners, working with the best and most trusted organisations to ensure quality service to consumers.

comparethemarket.com is a trading name of BISL Limited.  BISL Limited is authorised and regulated by the Financial Conduct Authority. Registered Address: Pegasus House, Bakewell Road, Orton Southgate, Peterborough, PE2 6YS. Registered in England number 3231094.

Click here to download the report.