Car insurance premiums in the UK have experienced an overall decline of 10.5% over the past year, according to the latest Consumer Intelligence Car Insurance Price Index. However, young drivers, particularly those under the age of 25, have not benefited from this trend, with premiums for this group increasing by 3% in the last quarter.
Despite the broader market seeing a 1.4% decrease during the same period, young drivers, especially those aged 17 to 19, are facing higher insurance costs. Telematics providers, which use technology to track driving habits, are reportedly less willing to offer competitive rates to this age group, leading to rising premiums.
Max Thompson, insurance insight manager at Consumer Intelligence, explained, “The biggest change in the market is the increases in competitive premiums for drivers aged 17 to 19 due to less interest in the age group from telematics providers.”
Recent Premium Trends and Regional Differences
While many UK motorists are benefiting from the recent drop in car insurance costs, young drivers are seeing the opposite. Since 2021, car insurance premiums have steadily risen, with average costs increasing nearly four times the rate of inflation. These increases have been driven by various factors, including regulatory changes and broader economic pressures.
However, the fourth quarter of 2024 saw comprehensive car insurance premiums fall by 16% compared to the previous year, marking the largest annual reduction in over a decade. The average premium now stands at £834, reflecting a significant decline after two years of steady increases from 2021 to 2023. The reductions have been seen across all regions in the UK, with some areas experiencing more substantial decreases than others.
Related topics: