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What's happening to car insurance premiums?
Cost of motor cover stayed steady in the beginning of 2026, says ABI data
Matthew is an award-winning journalist, specialising in savings, tax and insurance.
Dean is an award winning personal finance writer who’s spent over 15 years helping consumers navigate the tangled and fascinating world of insurance.
The cost of car insurance held steady at the beginning of this year, but the price of repairs has risen.
The data, published every three months by the Association of British Insurers (ABI), shows that the average premium from January to March 2026 was £560. That's just £1 more than the previous quarter but £30 less than the same time 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 first three months of this year, rising by £1 to £560.
However, premiums are still cheaper now than a couple of years ago. The average cost of an annual policy was £636 at the beginning 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 £2.9bn in motor insurance claims between January and March 2026.
An increase in repair costs is putting particular pressure on providers. The data shows claims for vehicle repairs totalled £1.9bn at the beginning of the year, up 3% on the last three months of 2025. The average accidental damage claim also increased to £3,699, up 8% on the previous quarter.
The ABI says that's largely down to the fact that modern components such as integrated sensors and cameras are making the job of fixing vehicles more specialised, time-intensive and costly.
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What affects premium prices?
Age and driving experience both affect premium prices.
The younger you are, the higher the cost of insuring a vehicle. That's because drivers who haven't been on the road for long are considered more likely to be involved in an accident, so providers raise their premiums to account for that increased risk.
The price of insuring your car gradually decreases as you get older and spend more time on the road.
You'd expect to see cover jump again once you reach retirement age, and insurers do take increased age-related risks into account. But when we looked at GoCompare data from the first three months of 2025, we found premiums don't increase dramatically until a driver is well into their 80s.
Go Compare's latest report shows where you live can also make a difference.
Those living in Greater London paid the most for their car insurance in the third quarter of this year. The average annual cost for a driver in the capital was £575. The cheapest car insurance quotes are in Wales, with an annual policy coming in on average at £324 a year. That's 84% cheaper than for drivers in London.
The comparison site says this price difference is usually because insurers consider drivers who live in and around the capital to drive in heavier traffic and to be more at risk of having their car damaged or stolen than drivers who live in Wales.
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 allow 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 cheaper 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.
