Young drivers see biggest savings as car insurance prices decline 16%

Car insurance premiums fell by 16% over the last 12 months, according to the latest Confused.com Car Insurance Price Index in association with WTW.

Published on 17 September 2025, the report found that motorists were paying an average of £735, £136 less than in the same period last year.

The drop means that average premiums have now fallen by £260, or 26%, since peaking at £995 in December 2023.

Drivers aged under 25 saw the most significant reductions in costs, with premiums down 17% on average year-on-year.

Seventeen-year-olds benefited most, with prices falling 28% to £2,008. This marked a £780 saving compared with last year.

Meanwhile, 18-year-olds also saw notable savings, with a 20% reduction bringing average premiums to £2,342.

Older drivers also benefited from falling premiums, although to a lesser degree. Motorists aged over 40 saw an average reduction of 15%, with 52-year-olds recording the smallest drop at 13% to £585.

Tim Rourke, UK head of property and casualty pricing, product, claims and underwriting at WTW, said: “The impact of market consolidation is potentially driving some broadening of footprints into traditionally less competitive areas of the market.

”Combined with lower claims frequencies in many segments, this may be maintaining the continued downward trend. Average premiums have now dropped for the seventh consecutive quarter despite a backdrop of high vehicle repair costs and third party injury claims inflation running higher than CPI levels.”

Regional variations

All regions recorded annual price falls, though the size of the reductions varied. Manchester and Merseyside saw the largest decrease at 19%, with average premiums down £204 to £859. In the north west, drivers experienced a similar fall of nearly 19%, paying £676 on average.

Northern Ireland saw the smallest decrease at 9%, with premiums falling from £929 to £849. South west England remained the cheapest region overall, with average premiums now at £499.

At a more local level, Liverpool and Warrington posted the biggest annual price falls, with premiums down 21% to £819 and £678 respectively. Despite a 16% fall, west central London remained the UK’s most expensive postcode for car insurance, at £1,394.

Steve Dukes, chief executive at Confused.com, said that while falling prices offered some relief to drivers, affordability remained a concern.

“Car insurance prices have been dropping consistently for some time – but prices are still 25% higher compared to three years ago,” he said.

“This is having a financial impact on many customers when combined with other financial pressures. It’s important that, as an industry, we don’t lose focus on the underlying factors which are pushing premiums higher than they have been historically. There’s still a significant opportunity to work together to deliver further value to customers.”