New data from the Association of British Insurers has revealed that average motor insurance premiums fell £60 in the second quarter of 2025.
It found that average premiums were £562 from April to June, compared to £622 during the same period in 2024.
Meanwhile, premiums fell by three per cent (£19) from the first quarter of the year.
The data also found that motor insurers paid out £3.1bn in car insurance claims in the second quarter of the year, with repair costs (£2.1bn) the main contributor. Repair costs continue to be driven up by more technology in vehicles, which add complexity and to jobs.
Meanwhile, broader economic inflation is also having an impact on repair costs, driving up the price of parts, materials, and energy costs, while a lack of skilled labour is also slowing down overall repair times.
Thefts
ABI data also found that the average claim for theft of and from a vehicle increased by three per cent (£319) on the previous quarter to £11.8k.
Mark Shepherd, head of general insurance policy at the ABI, said: “It’s encouraging to see motor premiums have fallen for a second consecutive quarter, offering some much-needed relief to drivers.
“But with the cost of cover still weighing on household finances, we must not lose momentum in tackling the persistent pressures driving up claims.
“That’s why we continue to urge the government to support the industry by investing in training for the repair sector, improving road safety, and holding firm against any rise in Insurance Premium Tax in the Autumn Budget.”
