Car insurance prices dropped by 5% in the first three months of 2025 compared to the same period last year, according to the Association of British Insurers (ABI).
The average cost of a comprehensive policy now stands at £589, down from £621 in early 2024.
The fall comes amid a notable drop in the frequency of claims and signs that inflation is beginning to stabilise. The wider rollout of 20mph speed zones in urban areas has also contributed to the decline, with insurers linking the change to fewer road incidents.
Young drivers see biggest savings
The sharpest reductions have been seen among 17 and 18-year-olds, some of whom have seen premiums fall by more than £500. Nonetheless, this age group continues to face the highest insurance costs of any demographic.
Still above pre-Covid levels
While the reduction has been welcomed by many, premiums remain significantly higher than they were before the pandemic. In 2023, the average annual policy cost stood at £478.
Experts continue to advise drivers to shop around, with major price differences still evident between insurers.
