The average cost of car insurance has risen for the first time in three years, according to data from price comparison website Confused.com. Drivers are now paying £719 a year on average for their motor cover, an increase of £8 over the past three months. While prices remain £38 cheaper than a year ago, the latest figures suggest the long-running trend of falling premiums may be starting to reverse.
Rising Claims Costs Driving Premiums Up
The U-turn has been driven by insurers facing rising costs, with the average value of an insurance claim soaring by 42% since 2020. Confused.com warned that with almost half of drivers reporting a higher renewal price in the last three months, motorists could soon see further increases when updating their cover. The research, based on more than six million car insurance quotes from Confused.com and WTW, highlights that the average payout per claim jumped from £3,842 in 2020 to £5,464 in 2025. However, the number of claims made over the same period dropped by 59%, indicating that while fewer incidents are reported, they are considerably more expensive to rectify.
Expert Advice on Saving Money
Matt Crole-Rees, motoring expert at Confused.com car insurance, said: “Drivers have benefitted from car insurance price drops for some time now. But now we’re seeing that prices are starting to increase slightly in recent months, which means motorists could soon see their price increase when it comes to their renewal. Car insurance prices are generally calculated based on risk and claims. And while there have been fewer reported claims in recent years, the increases we’re starting to see are likely down to the fact that when a claim is made, it’s more expensive for insurers to rectify. This isn’t something drivers can control, but it doesn’t mean to say they can’t still save money on their insurance. Shopping around when it comes to renewal is key to knowing you’re getting the best price. But not leaving it to the last minute could mean you save even more. That’s as our data shows that getting a quote 28 days before your renewal is due could save you as much as 53% on your price. So being organised and getting it sorted early can pay off.”
Tips to Help Drivers Cut Costs
Don’t over or underestimate your mileage: telling your insurer you only drive 4,000 miles a year to get a cheaper price doesn’t just put you at risk of invalidating your insurance - it could cost you more. On average, drivers covering around 4,000 miles a year pay £772 for their car insurance, compared to £614 for those who drive 12,000 miles. Driving more miles per year can suggest greater experience behind the wheel, which insurers may view as a lower risk. Lower mileage can sometimes indicate less regular driving experience and therefore a higher risk of making a claim. Equally, if you estimate your mileage too high, you could be paying more than you need to as spending more than the average amount of time on the road could indicate a higher risk of a claim.
Share the driving: If you live with a partner, parent or child who could benefit from using your car from time to time, add them to the insurance. Data shows that those who are the sole driver on a car pay £811 for their insurance vs £697 paid by those who have an additional named driver. But be honest, if you’re not sharing the car, don’t declare it.
Enhance your security: Simply put, the harder your car is to steal, the less of a risk it is. And this could mean you get cheaper car insurance. While most cars come with an immobiliser and alarm as standard, adding things like a wheel lock or tracking device could save you money. Also consider where your car is parked, especially at night. Opt for a well-lit area if you can. Driveways and residential parking areas generally seem to be considered a lower risk.
