Quoted car insurance premiums in the UK have dropped by 10.5% over the past year, according to the latest Consumer Intelligence Car Insurance Price Index.
However, premiums for drivers under the age of 25 have bucked this trend, rising by 3% in the last quarter, even as the overall market saw a 1.4% decline during the same period.
The most recent data indicates that the most significant impact has been on drivers aged 17 to 19. Telematics providers, which use technology to monitor driving behaviour, are reportedly showing less interest in offering competitive rates to this age group.
“The biggest change in the market is the increases in competitive premiums for drivers aged 17 to 19 due to less interest in the age group from telematics providers,” said Max Thompson, insurance insight manager at Consumer Intelligence.
Despite the recent declines, UK motorists have faced steep increases in car insurance premiums since 2021, with average costs rising nearly four times the rate of inflation between 2021 and mid-2024. This surge has been attributed to a range of factors, including regulatory changes and broader economic pressures.
As of the fourth quarter of 2024, comprehensive car insurance premiums in the UK had fallen by 16% over the past year, marking the largest annual reduction in over a decade. The average premium now stands at £834. This decline follows two years of steady increases from 2021 to 2023, and reductions were recorded across all regions.
Wales recorded the largest annual decrease in quoted premiums at 19.6%, with a further 3.3% drop in the past three months. Seven other regions, including the North West, North East, South East, South West, Yorkshire & The Humber, West Midlands, and Eastern region, also experienced double-digit declines.
In contrast, Scotland and London saw the smallest annual reductions, at 4.1% and 5% respectively, with both regions experiencing marginal quarterly changes of 0.3%.
Most drivers received quotes between £250 and £499, accounting for 26% of all quotes, while 24% were between £500 and £749. The market has also seen increased activity on price comparison websites, with 12 products leaving and 11 new ones launching in the past three months.
Thompson noted, “New brands launched tended to start with price cuts with six more price cut offers available in July compared with April.”
Since October 2013, average quoted premiums have nearly doubled, rising by 98.3%. The over-50s have seen the largest increase at 122.2%, while the under-25s have experienced a 35.8% rise. Drivers aged 25 to 49 have faced a 116.8% increase in average quoted premiums during the same period.
In the past year, the over-50s benefited most from falling prices, with average quoted premiums down 13.9%. Those aged 25 to 49 saw a 10.5% decrease, while under-25s experienced a smaller fall of 2.3%. Over the last three months, quoted premiums climbed 3% for under-25s but fell 2.3% for both the over-50s and those aged 25 to 49.
The proportion of top five quotes from telematics providers has also declined, now at 16%, down from 17% earlier this year. For under-25s, the share dropped to 37% from 39%, and for those aged 25 to 49, it fell to 14% from 16%. The proportion for over-50s remained unchanged at 9%.
All regions reported decreases in average quoted premiums over the past year, with Wales leading and Scotland and London seeing the smallest changes. The trend continued in the last quarter, with Wales again recording the largest drop.
Another notable trend is the shift in how consumers pay for their car insurance. The proportion of customers choosing to pay in instalments has risen from 25% in late 2021 to 42% by late 2024. This change may reflect both evolving consumer preferences and increased financial pressures on households.
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