Honest John

The Latest UK Car Insurance Costs & Statistics

Headline Statistics

  • £861 - the average cost of car insurance in the UK as of October 2024.
  • Car insurance premiums in the UK have dropped quarterly since the start of 2024. This follows 2 years of continuous increases every quarter.  
  • At an average of £1,230, London has the most expensive car insurance premium in the UK.
  • Electric vehicle (EV) insurance premiums in the UK are costlier than Internal Combustion Engine (ICE) cars, regardless of mileage.
  • Drivers between 17-24 years pay the highest car insurance premium of any age group.
  • London is the most expensive place in the UK to insure a car, with an average cost of between £3,108 and £3,618.17 for young drivers (under 25) and £707.06 for people above 65.
  • About 250,000 cars could be involved in accidents that require battery repairs by 2035.
  • Ghost brokers use social media to target and scam drivers (particularly those aged 17-24 years) looking for cheaper car insurance premiums.
  • Car insurance premiums on petrol cars are typically cheaper for low-mileage drivers than their diesel counterparts — the roles reverse after 7,999 miles. 
  • Inflation in the UK fell from 8.7% in Q3 of 2022 to 2.9% in Q3 of 2024 - this was only reflected in car insurance premiums in Q1 of 2024 .

Overview of the UK Car Insurance Market

Admiral Group is the biggest car insurance provider in the UK. They have an 11.28% market share — for comparison, Aviva is the second with a 10.56% market share. Admiral Group lost its post-COVID-19 hold on the car insurance market within 3 years — from 15.7% in 2021 to 11.28% in 2023.

  • The UK car insurance industry is worth an estimated £19.1 billion in 2024.
  • The top 10 car insurance providers in the UK have a combined market share of 70.08%.
  • Ghost brokers were linked to over 7,000 investigations in 2024 alone. 
  • Nearly 30% of young drivers aged 17-25 have unknowingly purchased invalid car insurance from illegal operators.

Car Insurance Premiums by Quarter

Period

Average Premium

Change (%)

Change (£)

Q1 2023

£657

4.26

28

Q2 2023

£776

18.11

119

Q3 2023

£924

16.02

148

Q4 2023

£995

7.68

71

Q1 2024

£941

-5.73

-54

Q2 2024

£882

-6.27

-59

Q3 2024

£861

-2.44

-21

 

Why Are Car Insurance Costs Rising?

While car insurance is now starting to drop, costs in the UK were rising due to a few factors such as inflation, increased repair and labour costs, the energy crisis, and a rise in vandalism claims in some parts of the UK. Quotes have risen by 82% since May 2021.

Since Q4 2023, average car premiums in the UK have dropped by about 15.56% — from an average of £995 to £861 as of Q3 2024. A few factors are keeping premiums at a relatively high rate:

  • Vehicle repair costs increased by an estimated 37% in Q2 of 2024.
  • Vandalism repair costs in South East England increased by 400% — from £2,033 in Q2 of 2023 to £10,170 in Q2 of 2024.
  • 40% of Brits know someone who has had their car vandalised in 2024.

Increased Repair Costs

The sharp rise in inflation drove up the cost of labour and car parts — two factors that determine repair costs. 

  • Repairing damage to a car bumper could cost £60-£1,320 depending on severity. 
  • Dent repair takes 1-7 hours and can cost between £90 per panel to £450.

Inflation

Inflation has driven up prices across the board, including for replacement vehicles, car parts, and labour. This broader economic pressure affects the cost of operating insurance businesses and is reflected in premiums.

  • Inflation rate in the UK has fallen from 9.4% in Q4 of 2022 to 2.9% in Q3 2024.
  • Quarterly car insurance premium trend peaked in Q4 2023 at an average of £995 — As of Q3 2024, it stands at an average of £861.

Energy Costs

Since most car repairs require electric power, volatility in energy prices tends to drag car repair costs along with it. The System Price of electricity, a reference price that reflects the cost the National Grid incurs to balance the supply and demand of electricity in Great Britain, captured the sharp increase in energy prices at the height of the Ukraine-Russia conflict. It's estimated that energy inflation has added more than £70 to each repair.

Repair Location

Regional variations in average rates for car repairs can impact the overall cost of insurance premiums. For example, labour rates in urban areas are often higher than in rural regions, reflecting the elevated cost of living and business operations in cities.

  • Vandalism repair costs in South East England increased by 400% — from £2,033 in Q2 of 2023 to £10,170 in Q2 of 2024.
  • North East England had fewer cases of vandalism in Q2 of 2024 compared to in Q2 of 2023. Vandalism repair costs in this area dropped by 53%. 
  • The average vandalism repair cost in the UK increased by 37% in Q2 2024.

Factors Impacting UK Car Insurance Costs

Geographic Location

Where you live has an impact on how much you’ll pay for car insurance. For example, in 2024, the average cost of car insurance in Leeds was £977, while drivers in Merseyside paid an average of £1,052. 

  • At an average of £1,230, London has the most expensive car insurance premium in the UK.
  • The Scottish Borders has the steadiest car insurance prices — car insurance premiums in other locations fell by as much as 10% (London), but drivers in the Scottish Borders only paid £19 less (or 3%) than they did in 2023. 
  • Car insurance premiums fell by 10% (£146) in London. But car owners still paid an average of £1,230. 
  • South West England has the cheapest car insurance prices in the UK, averaging £571 per annum.

Vehicle Type

Cars in the UK are categorised into insurance groups (1-50), influencing premiums based on factors like performance, repair costs, and safety. Some general trends include:

  • Hatchbacks in Group 1 cars are the cheapest to insure but have the least power.
  • Saloons and 4x4s typically have higher insurance premiums. Saloons often come with more powerful engines and higher repair costs, while 4x4s are pricier due to their size and potential off-road damage risks.
  • Sports cars or vehicles with high-performance engines usually fall into higher insurance groups (closer to group 50), making them among the most expensive to insure.

Average UK car insurance premium by insurance group.

Car Type

Example

Average Engine Size

Insurance Group

Average Annual Premium

Small hatchbacks

VW Polo, Hyundai i10

1.0 litres

Groups 1

£350–£550

Hatchbacks (with more power or features)

Ford Fiesta (base trims), Kia Rio, Nissan Pixo

1.0 to 1.2 litres

Groups 2-5

£400–£600

Mid-range family cars and compact SUVs

Chevrolet Spark, Toyota Corolla

1.2 to 1.6 litres

Groups 6-10

£500–£700

Family saloons and larger hatchbacks

BMW 1 Series, Audi A3, Nissan Qashqai

1.6 to 2.0 litres

Groups 11-30

£770–£1,120

SUVs and premium vehicles

Audi A4, BMW X5

2.0 to 3.0 litres

Groups 31-40

£700–£1,240

Luxury or high-performance cars

Porsche 718, Bentley Bentayga

3.0 litres and above

Groups 41-50

£2,447

 

The Driver - Record and Mileage

Driving record is a huge factor when calculating car insurance premiums. For car insurance companies, each second your car spends on the road increases the probability of being involved in an accident.

Average car insurance costs by mileage

  • As of 2023, drivers in the UK are yet to hit their pre-pandemic average annual mileage.
  • The UK average annual mileage pre-pandemic (2013-2018) was 7,268 miles.

Average Driver Annual Mileage in the UK:

Year

Average Annual Mileage

2013

7,409

2014

7,421

2015

7,334

2016

7,250

2017

7,134

2018

7,059

2019

7,090

2020

6,533

2021

5,398

2022

6,370

2023

6,551

 

  • Car insurance premiums on petrol cars are typically cheaper than their diesel counterparts — the roles reverse after 7,999 miles. 
  • Car insurance premiums in the UK are costlier for electric cars, irrespective of the mileage — £74 for EVs, £67 for diesel, and £65 for petrol cars.

Average car insurance costs by no claims bonus

The average cost of car insurance in the UK decreases with each year of no-claims bonus (NCB), as shown in the following table:

Years of NCB

Average car insurance price (starting at 13% NCB*)

1

£1,000

2

£870

3

£796.9

4

£718.5

* No claim bonus typically decreases year after year.

The Impact of Demographics on Car Insurance Premiums

It's long-known that age has a huge impact on how much people pay for car insurance. Younger, less experienced drivers (those aged 17 up to their mid-twenties) can expect to pay the most for car insurance, while older, more experienced drivers enjoy lower premiums - often even when driving more powerful and expensive cars.

  • Drivers over 60 years have the lowest car insurance premiums.
  • Drivers between 17-24 years pay the highest car insurance premium of any age group.
  • At £1,747.00, North Ireland has the lowest car insurance premium for drivers under 24 years.
  • London has the most expensive car insurance premiums in the UK — averages up to £3,618.17 for under 25-year-olds and £707.06 for people above 65 years.

Insurance Providers

  • The top 10 car insurance providers in the UK had a combined market share of 70.08% in 2023.
  • Admiral Group is the biggest car insurance provider in the UK. They have an 11.28% market share — for comparison, Aviva is the second with a 10.56% market share.
  • Admiral Group lost its post-COVID-19 hold on the car insurance market within 3 years — from 15.7% in 2021 to 11.28% in 2023.
  • RSA’s market share has grown consistently in the last 3 years — from 3.2% in 2021 to 4.1% in 2022 and 6.52% in 2023. 

Top 10 car insurance providers in the UK and their market share (2023)

 

Insurance provider

Market share 2021

Market share 2022

Market share 2023

1

Admiral Group (Admiral, Bell, Diamond, elephant.co.uk, Gladiator)

15.7%

14%

11.28%

2

Aviva (Aviva, Quotemehappy, One Call)

10.8%

10.5%

10.56%

3

Direct Line Group (Direct Line, Churchill and Darwin)

11.6%

10.8%

10.22%

4

Hastings

7.5%

7%

6.85%

5

LV=

8.7%

5.8%

6.61%

6

RSA

3.2%

4.1%

6.52%

7

AXA

12.6%

6.1%

6.26%

8

NFU Mutual

4.3%

3.9%

4.17%

9

esure (Sheila's Wheels, esure)

5.3%

4.2%

3.87%

10

Ageas

4.8%

4.1%

3.74%

Ghost Brokers

Ghost brokers are professional fraudsters who pose as middlemen for well-known insurance companies, claiming to offer legitimate car insurance at significantly discounted rates. In reality, they sell forged or invalid policies to unsuspecting consumers.

Ghost broker fraud is a growing issue in the UK, particularly affecting young drivers through social media scams.

Targeting Young Drivers

One survey found nearly 30% of young drivers aged 17-25 have unknowingly purchased invalid car insurance from illegal operators, often through social media. Approximately 89% of these cases involved significant issues, such as police stops or denied claims.

Large-Scale Operations

Ghost brokers were linked to over 7,000 investigations in 2024 alone. These scams often involve forging documents, falsifying details, or selling policies that are quickly cancelled.

Financial Impact

Cases include fraudsters pocketing tens of thousands of pounds, such as one individual who earned over £17,000 by selling fake policies through Instagram.

Fraudulent policies not only leave victims uninsured but can also result in fines, licence points, and vehicle impoundments.

FAQ:

What is the average car insurance cost?

The average cost of car insurance in the UK varies based on factors like age, location, and type of coverage. As of 2024:

  • Overall Average: The average annual premium in the UK is around £861. 
  • Age Variance: Younger drivers face far higher costs. For example, drivers aged 17-24 years can expect to pay double the average, while those in their mid-30s pay a little above the average. Older drivers tend to pay the least of any age group.
  • Region: The average cost of car insurance varies by region. For example, in South West England, 25-34 year old drivers pay an average of £997.15. Whereas drivers of the same age group in North West England pay around £1,498.28.
  • Policy Types: Comprehensive insurance, surprisingly, tends to be cheaper than third-party policies.

Car insurance costs have risen due to factors like higher repair costs, increased payouts for claims, and the use of advanced vehicle technologies that make repairs more expensive. For young or high-risk drivers, adding an experienced driver to their policy may help reduce costs.

What is the average cost of car insurance per month?

The average cost of insurance per month for low-mileage drivers (2,000-3,999 miles per year) is around £62 for petrol cars, £74 for diesel cars, and £72 for electric vehicles.

Above 7,999 miles per year, the average cost of car insurance per month is around £65 for petrol and diesel cars, and £69 for electric vehicles.

Why does car insurance cost so much?

The rising cost of new car insurance policies and renewals in the UK is due to a combination of factors such as inflation and increasing cost of living pushing up the cost of parts and labour. Other factors include rising claim costs, increase in insurance premium tax and cases of insurance fraud.

What is the average cost of car insurance for a new driver?

In the UK, new drivers can expect to pay an average of £1,500–£2,000 per year for car insurance. However, this amount can vary based on several factors:

  • Age of driver: Insurance costs are highest for 18-year-olds, gradually decreasing as drivers get older. Drivers between 17-24 years olds tend to pay the most of any age group in the UK, with average premiums reaching over £2,400.
  • Location: Young drivers in London face the highest premiums, while those in the South West enjoy the lowest.
  • Vehicle Type: Four-door saloons are the priciest to insure, whereas multi-purpose vehicles are the most affordable.
  • Driving Experience: Insurance costs drop the longer you’ve held your licence. New drivers face higher premiums because they are statistically more likely to be involved in accidents.

What is the average cost of car insurance for a 17-year-old?

The average cost of car insurance for a 17-year-old in the UK is typically twice as much as any age group over 25 years. The car insurance premium for a 17-year-old driver would be around £2,415.

What is the average cost of car insurance for an 80-year-old?

The average cost of car insurance for an 80-year-old in the UK is between £484 and £1,033.

When could the cost of your car insurance be reduced?

Completing the Pass Plus scheme can help you get a discount on your car insurance, but it's not guaranteed since insurance is a statistics-based calculation. 

Other factors such as inflation rate, energy costs, and repair costs can impact insurance costs. Generally, car insurance costs gradually fall for drivers between the ages of 25 and 50, with older (usually more experienced) drivers benefiting from the cheapest rates.

Does car insurance cost more depending on where you live?

Yes, insurance costs more depending on where you live. Location is one of the biggest factors affecting your premium. If you live in a busy city centre, your premium will be higher because you're more likely to be involved in an accident. 

Other factors include crime rates and weather conditions in the area, your occupation, national inflation rate and insurance premium tax.

Sources

ABI, QuoteZone, MoneySuperMarket, Insurance Business Magazine, City Of London Police, Zego, GoCompare, NimbleFins, uSwitch, Bymiles, Car Analytics