The average premium declined to £776 in September 2024, compared to £848 in September 2023, the comparison site has said.
Motorists have endured over two years of rising car insurance premiums but August 2024 and September 2024 have been the first months in which car insurance premiums were cheaper than the same period in the previous year. This has not happened since June 2022 – 26 months ago, said Compare the Market.
It said the fall in the cost of motor insurance may, in part, be due to the cost of claims for insurers stabilising in line with slowing inflation.
And, as a result of the decline, the cost of car insurance is, on average, £175 cheaper than in November 2023 when the average premium peaked at £951. However, the average premium has risen by £14 between August and September 2024.
It is typically over-80s and under 25s who pay the highest premiums for their car insurance. But Compare the Market said even these groups had seen price cuts.
Motorists aged 80 and above saw the most minimal falls in prices with the average premium falling by just £8 year-on-year to £637 in September 2024.
Young drivers, aged under 25, have benefited from the largest drop in average premiums as the cost of car insurance has fallen by £107 year-on-year to £1,786.
However, motorists are still being urged to shop around to make sure they secure the best price for their car insurance.
Experts advise that even if your renewal price drops, you could still save even more money by comparing prices online first.
Julie Daniels, motor insurance expert at Compare the Market, said: “Many motorists will be thrilled that the cost of car insurance is starting to fall compared to last year. This is great news following a period of increasingly steep prices.
“One specific tip I’d give to drivers who want to save money on their car insurance is it’s still important to compare prices and providers online first before renewing with your existing provider. Whilst some drivers might see their renewal price drop, by taking that action to shop around, you’ll see how much you could save by switching.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.