Car insurance prices plunge: drivers saving £120 as premiums fall

Richard Aucock
Tue, 17 Feb 2026

The average car insurance premium is now more than a third cheaper than the 2023 peak, with drivers saving an average of £122 in the past year alone.

That equates to a 16% saving in 12 months.

It’s the over-80s who’ve done best of all, with an 18% saving in car insurance between 2024 and 2025.

And although car insurance premiums for those aged 16-24 are also down, they’re still paying an average of £1312—almost 400% more than 65-79-year-olds, who pay the lowest average amount of £329.

The overall average car insurance premium now stands at £607, down from a peak of £950 in December 2023.

Compare the Market says the figures, part of its ‘Premium Drivers’ research, may in part be due to easing inflation, which is now at an eight-month low.

A fall in insurance claims could also be a factor, with personal injury claims related to vehicle accidents dropping to record lows between July and September 2025.

"After a prolonged period of sharp increases, it’s encouraging to see car insurance premiums continuing to fall, with drivers now paying some of the lowest prices we’ve seen in over two years,” says Compare the Market expert Sam Wilson.

"Lower inflation, easing repair and labour costs, plus a reduction in motor claims could all be helping to reduce premiums and those savings are starting to benefit motorists."

Drivers shouldn’t forget the benefit of shopping around either, adds the marketplace. Its figures show motorists could save almost £500 on car insurance by using its comparison tools.

Ask HJ

Can I insure my son on my car even though he isn't the owner?

I am about to upgrade my car and would like to gift the old car to my son. He cannot have a car in his name due to financial issues and a strong likelihood of having it repossessed, is it possible for him to insure it in his own name as the named main driver without me insuring it as I will have a new car to insure and want to use no claims on the new vehicle. What happens if he has an accident? Will it impact my no claims even though I am not insured on it but am still the owner?

The owner of the car doesn’t have to be the policyholder - if your son is the main driver of the car, he should have the policy in his name, and you as a named driver if you are likely to use the car. Having you as the policyholder, and your son as a named driver if he is the main driver of the car would be considered as fronting and is a form of insurance fraud. If your son is the policyholder then any claims made on the policy will not affect you, even if you are a named driver. Claims will only impact the policyholder.

Answered by Rhydian Jones

More Questions