The Latest UK Car Insurance Costs & Statistics

Headline Statistics

• At the end of 2024, there were an estimated 23 million active car insurance policies in the UK, covering most of the 33 million registered vehicles.
  
  
• The UK motor insurance market generated £26.9 billion in income in 2024/25, making it one of the largest areas of financial services.
  
  
• As of June 2025, the average annual premium is £757, a 16% fall year-on-year and the lowest in more than two years.
  
  
• Premiums have declined every quarter since Q1 2024, reversing two years of continuous rises.
  
  
• In Q2 2025, the average premium dropped from £668 in April to £648 in June, compared with £806 in the same quarter of 2024.
  
  
• London remains the most expensive region, with average premiums just under £1,000 (£991) per year.
  
  
• Insurers paid out a record £3.2 billion in Q1 2025, the highest quarterly figure since records began, followed by £3.1 billion in Q2 2025.
  
  
• The average cost per claim rose 13% in 2024 to £4,900, reflecting rising parts, labour and garage bills.
  
  
• Young drivers (17–24 years) face the steepest costs at £2,051, though this is down from £2,826 in 2024.
  
  
• At the other end of the scale, retired drivers face higher costs than those still employed, with premiums rising by about 50% (from £492 to £733) when declaring retirement.
  
  
• EVs remain more expensive to insure than petrol or diesel cars, and EV owners are 56% more likely to file a claim compared with petrol drivers.
  
  
• Mileage matters: petrol cars are usually cheaper to insure at lower mileages, but diesel cars often become cheaper beyond 8,000 miles per year.
• Inflation fell from 11.1% in late 2022 to around 2% by mid-2024, before edging back up to 3.8% in mid-2025. Insurers only began to reflect easing inflation in early 2025, but persistently high claims costs mean premiums remain above pre-2020 levels.

Overview of the UK Car Insurance Market

The UK motor insurance market is one of the largest segments of the financial services sector. In 2024/25 it generated an estimated £26.9 billion in income, though premium revenues are projected to dip slightly to around £20.7 billion in 2025 as average premiums fall.

The market remains highly concentrated, with the top 10 providers accounting for just over 70% of premiums written. Ongoing consolidation, such as Aviva’s 2025 acquisition of Direct Line Group, is reshaping the competitive landscape and is expected to make Aviva the single largest motor insurer in the UK.

Insurance Providers

• Admiral Group continues to lead with around 14% market share across its brands (Admiral, Bell, Diamond, Elephant.co.uk, Veygo, Gladiator). Admiral reported a 69% profit increase in H1 2025, reflecting strong underwriting discipline despite falling average premiums.
  
  

• Direct Line Group holds second place with 10.8% market share (Direct Line, Churchill, Green Flag, Privilege, Darwin, By Miles). However, in July 2025 Aviva acquired Direct Line Group, a deal that is set to reshape the competitive landscape by giving Aviva the single largest share of the UK car insurance market.
  
  

• Aviva currently sits third at 10.5%, but the Direct Line acquisition is expected to lift it comfortably into first place. Aviva also posted a 22% year-on-year increase in operating profit in H1 2025, supported by a 7% growth in general insurance premiums.
  
  

The UK motor insurance industry is worth an estimated £20.74 billion in 2025, with Admiral, Aviva, and Direct Line (soon combined) dominating the field.

 

Top 10 car insurance providers in the UK and their market share (2025) 

Collectively these insurers wrote around £16bn in premiums, representing around 70.5% of the market. 

Car Insurance Premium Trends

Car Insurance Premiums by Quarter

Fraud & Scams

Ghost Brokers

Ghost brokers are fraudsters who sell forged or invalid insurance policies, often posing as legitimate middlemen offering “cheap” cover. The issue has grown significantly in recent years:

• Over the past two years there has been a 50% rise in cases, with more than 7,000 investigations in 2024 alone.
  
  

• Young drivers are most at risk, with nearly 30% of 17–25 year olds admitting to unknowingly buying fake policies, often through Instagram, TikTok, or encrypted apps like WhatsApp and Telegram.
  
  

• Fraudsters can pocket tens of thousands of pounds; one case saw £17,000 earned through Instagram sales alone.
  Drivers who purchase these policies are essentially driving without valid insurance, even if they think they are covered. This can leave victims facing £300 fines, six penalty points, vehicle impoundment, and denied claims.
  
  
  

Telematics & Usage-Based Insurance

Telematics, or Black Box based insurance uses a device or smartphone app to track driving behaviour to inform insurance premiums. By understanding behaviour such as mileage, speed, braking and cornering a driver’s risk profile can be appropriately measured in order to inform insurance premiums.

• Around 14% of UK drivers hold a telematics/ UBI policy.

FAQ:

What is the average car insurance cost?
The average cost of car insurance in the UK varies depending on age, location, and policy type.

• Overall Average: At the end of 2023, premiums peaked at £995 before falling through 2024. By mid-2025, the average annual premium was around £757, the lowest in over two years.
  
  

• Age Variance: Younger drivers pay significantly more. For example, 17–24-year-olds face average costs of over £2,000, while drivers in their mid-30s typically pay £650–£750.
  
  

• Region: Costs vary widely by location. Drivers in the South West pay around £500, compared with nearly £1,000 in Inner London.
  
  

• Policy Types: Comprehensive insurance usually costs more than third-party cover, but offers broader protection.
  
  

When could the cost of your car insurance be reduced?
Premiums usually fall steadily from age 25 onwards, as drivers gain experience and accumulate no-claims bonuses.

• Discounts of 30–60% are common after 5+ years without a claim.
  
  

• Costs often remain lowest between ages 45–65.
  
  

• Some older drivers see premiums rise again after retirement or age 70.
  
  

Other ways to reduce premiums include taking the Pass Plus scheme, choosing a car in a lower insurance group, or opting for a telematics (black box) policy.

Sources

Forbes, ABI, IBISWorld, confused.com, moneyweek, go.compare, quotezone.co.uk, Aviva, WeCovr, Bumper, Car Analytics, USwitch, Auto Repair Focus, FCA, RUSI, Zego, MIB, insurance fraud bureau, Howden Group, Yahoo Finance, Insure.com, Insurance Business Magazine, MarketWatch, OCTO Telematics, Irish Independent, Quotezone, RAC Reports, ONS, Compare the Market, Statista.