After a rare few months where car insurance prices actually started to settle, the latest data shows the downward trend is already running out of steam.
While the average policy is still cheaper than the record highs we saw a couple of years back, premiums are beginning to creep up again for about 40% of drivers, and industry experts are warning that a bigger rise is on the horizon. It isn’t just bad luck; it’s a mix of soaring repair costs and the sheer complexity of modern car tech that’s pushing the bill back onto the motorist.
If your renewal is coming up, sitting back and letting it auto-renew is essentially just handing over extra cash for the sake of it. Here’s a look at why the market’s changing and the specific things you can do right now to lock in a lower price before the next big jump hits.
What has actually happened to car insurance prices
After three years of steep rises that pushed the average UK comprehensive policy to a record high of nearly £995 at the end of 2023, prices have been falling consistently since early 2024. According to Confused.com’s quarterly price index, the average policy now sits at around £711 a year, down roughly 13% over the past year. That’s a meaningful drop and one that most drivers should be able to take advantage of at renewal. The bad news is that the window for those savings may not stay open much longer.
Why prices are expected to start rising again
Analysts at EY and market research firm Defaqto have both flagged that premiums are likely to tick back up through 2026. EY forecasts an average rise of around 3%, which works out at roughly £15 added back onto the typical policy. The drivers behind this are familiar: repair costs remain stubbornly high, modern cars are increasingly expensive to fix because of the sensors and electronics packed into even minor bodywork, and inflation linked to the ongoing conflict in the Middle East is adding pressure across the board. Insurers paid out more in claims than they collected in premiums through 2025, which is not a situation they can sustain without adjusting prices.
Even with prices falling, nearly half of drivers are still seeing rises.
This is the part that catches people out. Despite the overall market average falling, around 40% of drivers still saw their renewal quote go up last year. That’s because averages mask a lot of individual variation. Your personal circumstances, including recent claims, changes in where you live, your job title, your car’s age and value, all feed into what you’re actually quoted. So even in a market where prices are broadly falling, your own renewal could easily be higher than last year if anything about your profile has changed.
Don’t just accept your renewal quote.
This is the single most important thing. Insurers are no longer legally allowed to charge loyal renewing customers more than new ones following FCA rules introduced in 2022, but that doesn’t mean your renewal quote will be the best price available.
Comparison sites regularly surface materially cheaper quotes from competing insurers, and spending twenty minutes shopping around before your renewal date can save a massive amount. One driver who shared their experience with MoneySavingExpert saw their quote jump from £374 to £549, then found a comparable policy for £251 using a comparison tool—a saving of nearly £300 a year.
If you’re not at renewal yet, it might still be worth checking now.
This sounds counterintuitive, but it’s a genuine option. If prices are expected to rise over the coming months, switching to a new policy now locks in the current lower market rate for a year. This only makes financial sense if you haven’t made any claims recently and can find a noticeably cheaper policy than the one you’re on.
The process is straightforward: find the cheaper policy, sign up for it, then cancel your existing one. You should receive a pro-rata refund for the remaining months, minus an admin fee of around £50. The one thing to be aware of is that cancelling early typically means you won’t earn that year’s no-claims bonus, so factor that in before you decide.
The sweet spot for getting the cheapest quotes
Timing your search properly makes a real difference. Data consistently shows that setting your policy start date around 25 days ahead of when you actually need it produces cheaper quotes than leaving it to the last minute. Insurers interpret last-minute shoppers as higher risk, and the pricing reflects that. If you’re shopping around now for a policy that starts next month, set the start date 25 days out rather than tomorrow.
What to aim for if you haven’t claimed
If you’ve had a clean year with no claims or incidents, you should realistically be targeting a renewal price at least 10% lower than last year. If the quote coming through is the same as last year or higher, that’s a sign to shop around immediately rather than accepting it. The market has moved in your favour over the past 12 months, and you should be seeing that reflected in what you pay.
Young drivers are seeing the biggest drops right now.
If you’re insuring a younger driver or are one yourself, this is particularly relevant. Seventeen-year-olds have seen premiums fall by around 25% over the past year, according to Confused.com data, and 18-year-olds by around 15%. The absolute cost is still high compared to older drivers, but the savings on offer at renewal are proportionally larger, which makes shopping around even more worthwhile for this group.
If you have more than one car at home
Comparison sites don’t automatically check multicar policies, so this is one you need to investigate manually. The general rule of thumb is to check the opposite of whatever you’re currently on. If you’re on separate policies for each car, get a quote for a multicar policy.
If you’re already on a multicar policy, check whether separate policies for each car would be cheaper. Admiral, LV, Aviva, Diamond, and Elephant all offer multicar policies and their systems can handle different renewal dates, so it’s worth running the numbers. Direct Line, Churchill, Axa, and Privilege all offer discounts for multiple cars on separate policies, which is worth checking if one of them is already the cheapest option for one of your vehicles.
A few things worth checking before you get quotes
Your job title can affect your premium more than most people realise, and small differences in how you describe your occupation can produce meaningfully different prices. Your annual mileage is worth reviewing too, particularly if you’ve been working from home more than before.
Overestimating mileage means overpaying, and with home working now the norm for many people, actual mileage has dropped considerably from pre-pandemic levels. Checking your last two MOT certificates will give you an accurate figure. It’s also worth considering whether a higher voluntary excess makes sense for your situation, as agreeing to pay more in the event of a claim typically brings the annual premium down.
Paying annually rather than monthly saves money.
Monthly payments are treated as a form of credit by insurers, which means interest is added on top of the base premium. Paying the full year upfront is almost always cheaper, and the difference can be worth checking if you have the flexibility to do it. If monthly is the only option that works for your budget, it’s still better than going uninsured, but it’s worth factoring the total annual cost into any comparison rather than just the monthly figure.
