Average motor insurance prices fell by 13% to £726 during 2025, according to the latest Confused.com Car Insurance Price Index.
The data, produced in association with WTW, found that younger drivers saw the greatest reduction with prices for under 25s down 16% year-on-year. Drivers aged 17 saw a 25% fall, from £2,568 to £1,932, while those aged 18 enjoyed an 18% reduction to an average quoted price of £2,262.
By contrast, drivers aged 48 saw policy prices drop just 10%, or £73, to £653.
Across the board, motor insurance prices have now come down for eight quarters in row, although the one per cent decline in the final quarter of 2025 was the smallest quarterly drop since the downward trend began in early 2024.
Personal injury claims
Tim Rourke, UK head of pricing, product, claims and underwriting, said: “Motorists have benefitted from lower insurance premiums driven by a continued decline in personal injury claims through 2025. Most likely due to the whiplash reforms, bodily injury claims have now fallen from 16% of insurers’ spend in 2021 to nine per cent in 2025.
“While UK motor insurers can expect to break even in 2025, rising claims inflation and higher repair costs linked to increasingly complex vehicle technology may lead to losses in 2026, putting pressure on insurers to reverse the recent downward trend in prices.”
Cost increases
Steve Dukes, CEO at Confused.com, added: “This recent drop in car insurance prices signals more than 12 months of decreases. While this creates opportunities for customers to save, motorists can see cost increases on the way in the form of vehicle excise duty, fuel prices and more.
“Customers continue to wrestle with broader financial pressures and so continue to look for ways to refresh their financial commitments, review the cover they have and save where they can.”
