In 2025, drivers across the UK are feeling the pinch as the average car insurance premium climbs to £777—an increase of £256 from last year. With inflation, a spike in motor claims, and costly car repairs all pushing prices higher, many households are scrambling to know what’s behind the jump and how to keep their own premiums in check. The good news? You’re not stuck with your renewal quote. With a few smart moves, it’s possible to reduce your premium—or at least soften the blow.
Breakdown
The recent hike in car insurance premiums isn’t random. Here’s what’s happening:
| Topic | Details |
|---|---|
| Average Price Increase | £256 more in 2025 compared to 2024 |
| New Average Premium | £777 for comprehensive coverage |
| Main Causes | Inflation, claims surge, high-tech repair costs |
| Industry Source | Association of British Insurers (ABI) |
| Expert Tips Available From | MoneyHelper, comparison tools |
Why Are Prices Rising?
Like most industries, car insurance is affected by inflation. Vehicle parts, labour, and operational costs have all gone up. According to the Office for National Statistics, motor repair prices rose by 9 percent over the past year. Insurers are passing these costs along to consumers.
Advanced Car Technology
Today’s vehicles come with features like lane sensors, radar, and emergency braking systems. While these gadgets boost safety, they also make repairs far more expensive. A bumper that used to cost £200 may now run into four figures if it houses a radar sensor.
More Drivers, More Claims
As more people return to normal driving patterns after the pandemic, accident rates and claims have climbed. The ABI reported a 16 percent rise in motor claims in 2024. More claims mean higher payouts for insurers—and higher costs for policyholders.
How to Cut Your Insurance Bill in 2025
Even though premiums are rising, there are plenty of ways to take control and save.
1. Shop Around Early
Start looking for new quotes about 3 to 4 weeks before your renewal date. Prices are usually lower if you don’t leave it to the last minute.
2. Try a Telematics Policy
A black box policy tracks your driving habits. Drive carefully, and insurers will reward you with lower rates—ideal for young or low-mileage drivers.
3. Raise Your Voluntary Excess
If you can afford it, increasing your voluntary excess can reduce your premium. Just make sure the amount is affordable if you need to make a claim.
4. Pay in Full
Paying monthly adds interest. If you pay annually, you could save 10 to 15 percent instantly.
5. Drive Less
Lower mileage often means lower risk. If you’ve started working from home or using public transport more often, updating your estimated annual mileage can lower your rate.
6. Add an Experienced Driver
Adding a responsible named driver to your policy can bring costs down, especially for new or younger drivers.
7. Secure Your Car
Alarms, immobilisers, and dash cams not only make your car safer—they can also reduce your premium.
8. Skip the Add-Ons
Review extras like breakdown cover or legal protection. If you already get them from your bank or elsewhere, there’s no need to pay twice.
9. Protect Your No-Claims Bonus
Even if it costs a little extra, protecting your no-claims bonus can save you a lot more over time.
10. Choose the Right Car
Cars in insurance group 1–10 are usually cheaper to insure. If you’re buying a new vehicle, consider its insurance group before making a decision.
Real-Life Saving Example
Claire, a 38-year-old from Bristol, received a renewal notice for £790—up from £520. Instead of renewing, she:
- Compared quotes across several platforms
- Switched to a telematics policy
- Increased her voluntary excess to £500
- Removed legal cover she didn’t need
Her new premium dropped to £490, saving her £300 in total.
Expert Opinion
James Dalton from the ABI explains that while insurers are doing what they can, inflation and the complexity of car repairs are pushing prices up. Consumers are urged to shop around, look into flexible policy options, and not accept the first quote they receive.
Industry experts are also asking for improved vehicle security standards and greater access to replacement parts to help bring long-term insurance costs under control.
FAQs
Why is car insurance rising in 2025?
Due to inflation, more claims, and expensive car repairs.
What is the average UK premium in 2025?
It’s £777 for a comprehensive policy.
Can I avoid the £256 price increase?
Yes, by comparing quotes and using cost-saving methods.
Is it cheaper to pay monthly or annually?
Paying annually is usually cheaper by 10–15%.
Do telematics policies really help?
Yes, safe driving with a black box can lower your costs.
