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What's happening to car insurance premiums?
Matthew is an award-winning journalist, specialising in savings, tax and insurance.
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Compare dealsThe cost of car insurance fell by just £4 in the third quarter of this year, despite insurers paying out £3.2bn in claims.
The data, published every three months by the Association of British Insurers (ABI), shows that the average premium from July to September 2026 was £562. That's only slightly less than the previous three months but 2% more than the same period in 2025.
Read on to find out more about the current cost of car insurance and for tips on how to pay less.
What's happening to car insurance prices?
The ABI's latest figures show that average car insurance premiums stayed roughly the same in the third three months of this year, dropping by just £4 to £562.
However, premiums are still cheaper now than a couple of years ago. The average cost of an annual policy was £607 in the third quarter of 2024.
Published every three months, the ABI's data gives the most accurate picture of the market, as it's based on actual prices paid by drivers (as opposed to quotes), and covers both new customers and those renewing existing policies.
The chart shows how the average cost of a car insurance premium has changed since January 2022:
Source: Association of British Insurers (ABI)
- Find out more: Best car insurance companies
Why is the cost of car insurance still high?
Claims costs are blamed for the high price customers are still paying to insure their vehicles.
The ABI's latest figures show that insurers paid out £3.2bn in motor insurance claims between July and September 2026. That's the same as the previous quarter.
The average claim payout as £4,900, 1% more than than during the same three months in 2025.
An increase in repair costs is putting particular pressure on providers. The data shows that claims for windscreen repairs, in particular, saw a sharp increase in the third quarter of this year, with the average cost rising 5% to £298.
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How much could you save by switching?
You can potentially make big savings by shopping around for a better deal.
A good place to start is by checking out price comparison sites, which enable you to view multiple car insurance quotes at a glance. The main ones for insurance are Compare the Market, Confused.com, GoCompare and MoneySuperMarket.
But remember, not all insurers are on price comparison websites: Which? Recommended motor insurance providers Direct Line and NFU Mutual are examples of this.
Other ways to keep costs down
Here are a few simple ways you can reduce the cost of car insurance:
- Go annual Paying for a whole year in one go instead of monthly could save you hundreds of pounds.
- Renew early You'll often get a lower price if you renew your cover a few weeks (rather than a few days) in advance of the policy's end date.
- Keep mileage down Try to limit the miles you clock up over the year to avoid being hit with a higher premium.
- Tweak your job title Your occupation can also impact your premium. One trick to get around this – without lying – is to try to tweak your job title. For example, instead of 'barber', try saying 'hairdresser' or 'hair stylist'.
- Haggle If you don't want to switch to another insurer, you might be able to get the price down by haggling.
Find out more: How to find cheap car insurance
This story is regularly updated with the latest figures from ABI and comparison sites, including Confused and Compare the Market.
