Why Car Insurance Premiums Are Rising Again After Six Quarters of Falling Prices

For more than a year, drivers renewing their car insurance have enjoyed a rare run of good news, with quoted prices drifting steadily downwards from the painful peak of 2024. That run now appears to be over. New analysis from Consumer Intelligence shows car insurance premiums rose in the most recent quarter for the first time since the start of 2024, and the discounts that comparison sites had been splashing across their pages are quietly being withdrawn. If your renewal is due in the coming months, the era of automatically expecting a lower price has likely come to an end.

The Consumer Intelligence Motor Competitive Index, which has tracked the cheapest quotes on price comparison websites since 2013 and whose data is used by the Office for National Statistics, found that average quoted premiums rose 2.4% in the 12 months to April 2026. More tellingly, the latest single quarter saw a 4.5% increase. That is the first quarterly rise since the first quarter of 2024 and brings to an end six consecutive quarters of falling prices. The shift is small in cash terms for now, but the direction of travel has reversed, and that is what tends to set the tone for the year ahead.

The discounts are disappearing too

Price is only half the story. The other signal sits in the marketing. The number of price cut straplines advertised on comparison sites, the familiar “save up to” promises that pull shoppers in, fell sharply from 98 in October 2025 to 72 in April 2026. The October figure was the highest recorded since the introduction of the General Insurance Pricing Practices rules; April’s 72 is the lowest since October 2024. New brands entering the market softened the fall a little, but the net loss of 26 straplines in six months is a clear sign that insurers no longer feel the need to compete so hard on headline discounts.

Laura Vas, Senior Insight Analyst at Consumer Intelligence, said the two trends were telling the same story. “Rising premiums and retreating price cut offers are telling the same story,” she said. “The deflationary period that followed the market’s 2024 peak appears to be over, and insurers and aggregators are adjusting their strategies accordingly. The withdrawal of price cut straplines by at least one major aggregator is a particularly clear signal that the market’s trading environment has shifted.” In plain terms, the companies that set prices believe the bottom of the cycle has passed.

Who is being hit hardest

The increases are not landing evenly. Younger and middle aged drivers are bearing the brunt. Premiums for the under-25 group rose 6.5% over the year, while those for 25 to 49 year olds were up 3.0%. Drivers over 50 saw prices remain broadly flat, down 0.3% annually. Over the most recent quarter, however, every age group felt the squeeze, with the sharpest rises among 25 to 49 year olds (up 5.4%) and the over-50s (up 4.7%). The pattern suggests the older drivers who were shielded over the past year are now being drawn into the rising tide.

Where you live makes a striking difference. All eleven British regions recorded quarterly inflation, but the annual picture varied enormously. Scotland led the way with quoted premiums up 13.8% over the year and 8.9% in the quarter alone, followed by London at 10.0% annually. At the other end, the North East and North West actually saw annual deflation of 2.7% and 2.4% respectively. So while the national trend has turned upwards, a driver in Glasgow or central London is experiencing something far more aggressive than someone in Newcastle or Manchester.

There is a glimmer of better news for the youngest drivers. Competition among telematics, or black box, providers strengthened in the under-25 bracket, with 40% of the five cheapest quotes for that group now delivered by telematics products, up two percentage points over the quarter. Two challenger telematics firms drove the change by lowering their prices to win business. For a young driver facing the steepest increases, a black box policy that rewards careful driving is increasingly likely to produce one of the cheapest quotes on the market.

Why prices are turning

Several pressures are pushing in the same direction. Repair costs remain the biggest single driver of motor claims inflation. Modern cars are packed with sensors, cameras and complex electronics, so even a minor knock can mean recalibrating driver assistance systems and replacing expensive parts. The rising cost of those repairs feeds directly into what insurers expect to pay out, and ultimately into premiums. A weaker pound and higher energy and parts prices, partly linked to global oil market volatility, have added to the strain on repair bills.

Uninsured and untraceable vehicles also load extra cost onto honest motorists, because the claims they generate are funded by a levy spread across every legitimate policy. Our investigation into how thousands of vehicles on UK roads have no traceable owner sets out how that hidden cost works and why it pushes premiums higher for everyone who plays by the rules. Add in fraud, rising theft of keyless cars and the cost of replacing written off electric vehicles, and the ingredients for renewed price increases are all present.

The way insurers are allowed to price has changed too, and that shapes what you see at renewal. Since the General Insurance Pricing Practices rules came into force at the start of 2022, companies can no longer quote an existing customer a higher price at renewal than they would charge an equivalent new customer for the same policy. That reform ended the worst of the old loyalty penalty, but it also removed the deep new-customer discounts that used to reward switching, which is part of why the recent crop of headline price cuts has been comparatively easy for insurers to withdraw.

It is worth keeping the scale in perspective. The increases recorded so far are modest compared with the brutal rises of 2023 and 2024, when quoted premiums at one point climbed more than 50% in a single year. What the latest data signals is a turning point rather than a return to crisis, and drivers who shop around carefully can still soften the blow. The danger lies in assuming, as many have over the past year, that simply renewing will deliver a cheaper price.

What happens next will depend on whether claims costs keep climbing. If repair bills, theft and the cost of writing off damaged electric cars continue to rise, the quarterly increases seen so far could harden into a sustained upward trend through the rest of 2026. If oil prices ease and the pound strengthens, the pressure on parts and repair costs could fade and slow the rises. Either way, the comfortable assumption that prices only fall has gone, and the drivers who fare best will be those who treat every renewal as a fresh decision rather than a formality.

What to do

Start shopping early. Comparison site and regulator data consistently show that the cheapest quotes appear around three to four weeks before your renewal date, and prices creep up the closer you get to the deadline. Set a reminder for around 26 days before renewal and run quotes then, rather than waiting for the auto-renewal notice to arrive. Never simply accept the renewal price your existing insurer sends; it is frequently higher than what the same company will quote a new customer.

Check that your details are accurate and that you are not over-insuring. An honest, precise annual mileage, the correct job title and a realistic estimate of your car’s value can all shave money off a quote. Consider whether a higher voluntary excess suits your finances, since raising it lowers the premium, but only commit to an amount you could comfortably pay if you needed to claim. Paying annually rather than monthly avoids the interest charged on instalments, which can add a tidy sum over a year.

For younger drivers facing the largest increases, a telematics policy is now one of the most effective ways to secure a competitive price, and the data shows those products winning more of the cheapest quotes than ever. Adding an experienced named driver, choosing a car in a low insurance group and building a clean no claims record all help too. The market has turned, but a careful, organised approach to renewal still puts you in control of what you pay.

Sources:

• Consumer Intelligence: Car Insurance Prices Rise as Advertised Discounts Retreat
• Consumer Intelligence: Motor Competitive Index