Why is car insurance so expensive?
Key takeaways
Average car insurance premiums are down 6% year-on-year but personal factors, such as your age, the type of car you drive and where you live, can push up your premium.
Opting for telematics insurance can lower your car insurance premium, especially if you’re a young driver.
Comparing quotes with MoneySuperMarket can save you up to 48.32%
^ on your car insurance.
Why is my car insurance so expensive?
Average car insurance premiums are down 6% year on year, according to the latest MoneySuperMarket data (based on the median annual price of car insurance policies sold through MoneySuperMarket in Mar 26) so if you’re still experiencing high premiums - perhaps reaching into the thousands to pay for annual cover - it’s likely to be because insurers consider you a high-risk driver.
Your insurance provider determines the level of risk you pose by considering certain factors, like your age, job title, postcode, and the car you drive. But other factors have an effect on prices too; things like fraudulent claims and uninsured drivers hike prices up for everyone.
Don’t worry, there are steps you can take to lower the cost of your car insurance, which we look at below.
📣 Did you know? The average motor insurance premium was £560 in Q1 2026, according to the latest data from the Association of British Insurers (ABI). That’s £20 lower than Q1 2025, and stable compared to Q4 2025.
Which personal factors affect the price of my car insurance?
When calculating your premium, insurers will consider all of your personal details and assess how likely it is that you will make a claim. If they think your personal circumstances mean that you are more likely to claim, then they will deem you higher risk and quote you a higher price.
Some of the personal factors that will affect your premium include:
Your age
The value and age of your car
Which insurance group your car is in or what vehicle risk rating it has
Your job
Where you live (factors such as the crime rate in your area, the amount of accidents and your proximity to the city will all affect your premiums)
Your driving record - points on your licence and past claims
How long you’ve been driving
Why is my car insurance more expensive at renewal?
Although less common than it once was, you may still find that you are quoted a higher price than the previous year when you come to renew your insurance.
New rules introduced by the regulator have stamped out the worst behaviour where insurers would charge loyal customers more over time, sometimes called the loyalty penalty.
But there are other reasons that your price might increase, including inflation or a change in your personal circumstances.
Why is car insurance so expensive for young drivers?
Average premiums for young drivers under 25 dropped 12% in March 2026 compared to March 2026, according to MoneySuperMarket data but this age group still has the most expensive premiums.
Age is one of the most important factors when it comes to calculating premiums, because younger people are statistically more likely to make an insurance claim.
In other words, young drivers carry higher claim risks, so they can often pay more than double the average car insurance premium.
Sadly there is no quick fix to this, but there are still some things you can do to bring down the price. Some policies are specifically designed for younger drivers and offer cheaper quotes if drivers agree to certain conditions, such as the monitoring of their driving by a ‘black box’.
20-29 age group
Policy Type | Average premiums |
|---|---|
Comprehensive | £982.21 |
Third Party Only | £1293.26 |
Third Party, Fire & Theft | £1387.56 |
60+ age group
Policy Type | Average premiums |
|---|---|
Comprehensive | £373.63 |
Third Party Only | £425.91 |
Third Party, Fire & Theft | £374.02 |
How does my job affect my car insurance?
Your occupation can also push up the cost of car insurance as some jobs are considered riskier than others. A tree surgeon, for example, will likely pay more for car insurance than an accountant.
This won’t always be the case, however, as a range of other factors are also taken into account. If you drive your car as part of your job, you may need a specialist business car policy. Otherwise, the insurer could refuse to pay any claims you make.
It is possible to tweak your job title a little in a way that may bring down your premiums. We found that a “journalist” can be charged up to 33% more than “editorial staff”, for example. However, make sure you are honest and do not mislead the insurer about what you do, as this could cause your insurance to be deemed invalid or even be considered insurance fraud.
Why is car insurance so expensive in my local area?
When you’re shopping around for car insurance quotes, the price may seem extreme. Location is one of the most important factors insurers consider when determining car insurance prices, with drivers in some regions paying more than twice the cost of others.
Underwriters will study statistics in your local area to work out how much of a risk your postcode is. They look at things like:
Traffic density
Population density
Crime rates
Number of claims in your area (including fraudulent claims)
Number of accidents in your area
High-risk road systems
While you are unlikely to move house in search of better car insurance premiums, make sure to update your insurer if you do move as it could lead to a better deal.
How can I save money on my car insurance?
Don’t auto-renew
Most car insurance companies raise your premium when you renew automatically. You can find cheaper deals by shopping around. MoneySuperMarket does this work for you: comparing quotes with us can save you up to 48.32%
Buy policies 25 days early
Insurers generally offer you their best deals a few weeks before your policy starts. The cheapest time is usually 25 days before - comparing quotes on this day can save you up to £425
Increase your excess
Insurers are likely to reduce the cost of cover if you’re willing to increase your voluntary excess. Be careful not to increase your excess so much that you can't afford it.
Take out telematics insurance
Insurers can monitor your driving habits with telematics hardware, so responsible drivers earn lower premiums.
Drive fewer miles
The more time you spend on the road, the higher the chances are of you being involved in a road accident. That's why someone who drives 10,000 miles a year pays on average 3%
Add a named driver
Adding an experienced driver to your policy tells insurers you won’t be solely responsible for the car, so they’ll reduce the price.
Buy a sensible car
Smaller, less powerful cars are cheaper, safer to drive, and less attractive to thieves, so the overall risk for the insurer is lower.
Pay annually
Paying an annual lump sum might mean a greater initial expense, but insurers charge interest when you spread the cost over monthly payments. Annual payments are up to 31%
How can I compare car insurance quotes?
The easiest way to find cheaper car insurance is to compare quotes with MoneySuperMarket. All you need to do is tell us a little about yourself and your driving history, and we will show you our selection of the best deals.
You’ll be able to compare policies by the overall monthly and annual cost, the cover you’ll get, and the excess you’ll need to pay to make a claim. Once you’ve found the deal you want, just click through to the provider’s website to finalise your purchase.
As with any kind of insurance, the cheapest option isn’t always the best. We recommend you try to balance the cover you’ll get with the overall cost of your policy, so you don’t end up over- or under-insuring yourself
Frequently asked questions
Is car insurance going up or down in 2026?
Car insurance premiums are going down, on average, in 2026 compared to 2025. MoneySuperMarket data shows that car insurance prices for all drivers were down 6% in March 2026 compared to the same period last year. Even young drivers have seen the cost of car insurance fall, with a 12% reduction year on year.
However, there are signs of this slowing down as our month on month data shows car insurance prices for all drivers increased 1% in March 2026 compared to February 2026.
Looking over the long-term, car insurance premiums are higher than before the Covid-19 pandemic. The average cost in 2017, for instance, was £484, according to the Association of British Insurers (ABI), whereas the average annual cost in 2015 was £564.
What impacts car insurance prices?
Several factors influence the car insurance market, including:
Rising repair bills driven by higher parts costs and modern vehicles becoming more complex to repair
Economic and market factors like inflation
Increased weather-related damage claims
Increased pothole damage claims
Higher rates of vehicle theft, especially for high-end vehicles
Vehicle hire costs
Insurance premium tax
Author
Saarrah Mussa
Former Content Writer
Saarrah was a MoneySuperMarket's in-house pet insurance expert. With broad experience writing across insurance products Saarrah is acutely aware of the complexities and costs consumers have to face...
Reviewer
Sarah Tooze
Car & Van Insurance Expert
Sarah Tooze has been a motoring journalist for more than 15 years, specialising in company cars and vans, and has won a number of awards during her career, including the Newspress ‘Automotive...
