Cost of car insurance continues to fall

The average cost of car insurance has fallen £164 in a year, to an average of £777, new data has revealed.

It is younger drivers who are pocketing the biggest savings on annual car insurance premiums, with those aged 17-25 seeing savings of up to 23%, according to Confused.com figures.

Both 17-year-olds and 18-year-olds are seeing year-on-year savings of 23%. Surprisingly, it is 18-year-olds who have the highest premiums, averaging £2434 – although this is £711 cheaper than last year.

For 17-year-olds, an average premium of £2258 saves them a still-healthy £611 compared to 2024.

Big savings continue throughout the list of younger drivers, with even 25-year-old average premiums dropping £318 to £1279, saving them 20%.

Older drivers typically pay the least for their car insurance, but they too are seeing useful savings. Those aged 55 and over are now paying less than £600 a year.

However, despite average premiums falling overall, an alarming 1 in 2 motorists who received a car insurance renewal price in the past three months report it was more expensive than before – by an average of £81.

This shows that while prices are dropping for those buying new policies, not all customers are seeing the benefits.

Those who chose not to accept their renewal price, shopped around and switched insurers were able to save an average of £77.

This infuriating practice frustrates motorists, who feel they are being ‘gamed’ by car insurers who ‘try their luck’ with a more expensive premium, only to drop it again when challenged on the phone.

"Staying on top of your insurance is key to getting the best price. You’ll often see a better price if you shop around at renewal time," says Confused.com’s Rhydian Jones.

"Even if your renewal price from your insurer is cheaper than last year, it’s likely there will be another insurer out there offering a better price."

Doing this ahead of time can save you even more too. Confused.com data shows that if you shop around about three weeks before your policy is due to renew, you could benefit from the biggest savings.

"Leaving it too late, or simply accepting your insurer’s renewal price, could mean you lose out on great savings."

Ask HJ

Will adding a younger driver to my policy as a named driver reduce my premium?

As I get older my insurance premium seems to gradually creep up each year, in spite of many years of claim free motoring. There seems to be quite a lot in the press of late regarding older drivers and the possible introduction of a re-test at 70 years old. I have my eyes tested each year and agree that this should be a requirement. Do you think there would be any benefit in adding another, younger, family member as an extra driver to the policy to stop the premium increasing as much? After all, this seems like a similar situation for a young inexperienced driver adding an older driver to their policy for the same reason.

Adding a named driver to your car insurance policy can be an effective way to save money on your insurance, if they’re likely to use or borrow the car from time to time. Though if and how much this will save you will depend on their driving experience and history. It’s worth speaking to your insurer or running a quote to see how much this could cost you. Though, it’s worth noting that having too many drivers could in fact have the opposite effect and cost you more.

Answered by Rhydian Jones

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