Car insurance prices have seen a significant drop in the last few months of 2024, bringing welcome relief to UK motorists who could see the trend continue throughout the new year.
The average cost of car insurance fell to £769 in Q4 2024, down from £885 in the same period the previous year, according to new data.
The decrease comes after a dramatic surge in prices during 2023 which saw drivers pay huge sums for car insurance.
The price reduction offers some respite for drivers who have faced increasing costs from repair bills, car tax increases and new Low Emission Zones.
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Prices for car insurance still remain high for young drivers
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Looking at price drops by region, London still remains the most expensive area for car insurance, with premiums reaching £1,144 in December 2024.
The West Midlands follows as the second most costly area, with drivers paying an average of £921, followed by Yorkshire and North West England, with premiums exceeding £780.
In contrast, the South West of England offers the lowest premiums, with drivers paying an average of £565. Scotland and the North East of England show relatively moderate rates, with average premiums of £611 and £608 respectively.
Young drivers have also benefited from the downward trend in insurance costs. Data shows that motorists aged 17 to 24 saw their premiums fall from £2,130 in October to £1,986 in December 2024.
This reduction is particularly significant as younger drivers typically face higher premiums due to their limited road experience.
Insurance providers generally charge more for young drivers as they are statistically more likely to be involved in accidents.
Greg Wilson, CEO of Quotezone.co.uk said: “At a time when so many are struggling to keep budgets in place, the news that insurance premiums are starting to come down in price comes as much-needed relief.
“While we hope the lower insurance premiums highlighted in the final quarter of 2024 continue throughout 2025, we also want to make sure motorists are keeping their insurance premiums as low as they possibly can.”
Key factors affecting insurance costs include the driver’s age, occupation, annual mileage and where the vehicle is parked overnight.
Vehicle modifications can also impact premium costs significantly. Even seemingly minor changes such as vehicle branding, spoilers or alloy wheels need to be declared to insurers.
Wilson added: “It could simply be that a driver has moved house or job or hasn’t updated their mileage with their insurance provider, but there are many factors that can inflate and even invalidate an insurance policy if the details are inaccurate.”
Meanwhile, Rhydian Jones, motoring expert at Confused.com car insurance explained that after a “turbulent couple of years and record-high prices, this is the good news we’ve all been waiting for”.
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Prices began dropping in Q4 of last year
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However, it’s clear that not all drivers are seeing these savings, he warned. “Those who’ve received their renewal recently might’ve seen their price increase. This can be confusing, as with another year’s no-claims bonus and more driving experience, this should, in theory, drive prices down.”
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.