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Drivers can expect to pay £400 on average for their annual car insurance policy according to a new report, the lowest amount in two years, although it remains important to shop around when your policy is up for renewal.
This figure, from the most recent car insurance index from Go.Compare, is around £14 cheaper than the average cost three months ago. This makes it the lowest average recorded since 2023.
Tom Banks, spokesperson for Go.Compare Car Insurance, said: “It’s great for motorists that this downward trend in car insurance prices is continuing into the middle of 2025. Let’s hope it continues for the next quarter, so more drivers can take advantage of the reductions, no matter what time of the year their car insurance is up for renewal.”
Diving into different areas, the study found a considerable difference between the amount paid by drivers in the capital and those in more rural areas. According to Go.Compare’s data car insurance in Greater London costs around £575 a year. This is around 77% more expensive than in Wales, where the average cost of cover is £324
From an age-based perspective, the report found that drivers around retirement age are the best off, with the lowest cost premiums of all age groups. Drivers aged 65 and over pay just £348 for car insurance on average – that’s 53% less than the average £754 annual premium for drivers aged 17-24.
Although car insurance premiums are falling, it’s still important to look at ways you might be able to keep costs down.
How to drive down car insurance costs
The best way to start cutting down on your insurance costs is to compare quotes from a variety of providers and find out which ones offer the best deals.
Never automatically renew with the provider you’re currently using, especially if you’ve recently turned 50 – it’s likely that there will be better deals available to you now. As a general rule, your car insurance is likely to get cheaper as you get older and build up years of driving experience, but once you reach your early 70s, it often starts creeping up again. You can find out more about the impact of your age on premiums in our article What happens to car insurance premiums as you get older?
Tom Banks said: “Car insurance is a significant part of a driver’s annual spend, and that’s why it’s so important to shop around when your car insurance comes up for renewal, even if your renewal quote is cheaper than your premium from the year before.
“Insurers take into account many different risk factors when it comes to pricing car insurance cover – things like where you live, the car you drive, the miles you drive, as well as your occupation. So, rather than auto-renewing or sticking with the same insurer year-in year-out, pop your details into a comparison website and take a look at what the market is doing – you might be pleasantly surprised.
“You can compare the different levels of cover, what you want from your car insurance policy, and whether bundling extras such as breakdown cover could save you money in the long run. Very rarely are two car insurance policies the same, that’s why it’s important to evaluate what is important to you and what will give you peace of mind and buy a policy that suits your needs and your pocket.”
Find out more in our article Car insurance: why loyalty still doesn’t pay. There’s a wide range of comparison websites such as MoneySuperMarket*, Uswitch, Go.Compare and Compare the Market, which can help you compare car insurance quotes and find the best deal to suit your needs, whether you’re looking for third party, third party fire and theft, or comprehensive cover.
Even once you’ve settled on a particular policy, there may be a few handy ways of cutting your costs, such as paying your premiums annually, keeping your car secure, and changing the way you describe your occupation. Read more in our article 10 practical tips to reduce your car insurance premiums.
Or, for more tips on keeping travel costs down in general, check out our articles 11 ways to keep fuel costs down and 12 ways to save on car and travel costs.
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