Car Insurance Bills Rose by £8 This Quarter as a Two-Year Price Drop Ends

• Standard car insurance premiums rose by £8 in the latest quarter, the first sustained rise after more than two years of prices falling.
• The average fully comp policy now costs £719 a year, according to data from Confused.com and Willis Towers Watson.
• Premiums are still 5 percent cheaper than a year ago, but the direction has changed, and drivers renewing soon are being warned not to assume last year’s price.

The Two Year Price Drop Is Over

Car insurance premiums have risen by £8 over the latest quarter, according to the long-running price index compiled by Confused.com with the analyst Willis Towers Watson, taking the average fully comp policy to £719 a year. It is a small figure on its own, but it marks the end of a run that saw premiums fall for nine consecutive quarters after peaking at £995 at the end of 2023. For the first time in more than two years, the line on the chart is pointing back up.

Who Is Actually Paying More

The rise has not been even across the year. Premiums increased in three of the first five months, up 2.3 percent in April and a further 0.4 percent in February, before the latest quarterly data confirmed the trend had taken hold rather than being a one-off blip. Even with the recent increase, the average policy is still around 5 percent cheaper than it was a year ago, down from £757, so most drivers renewing this month will likely still pay less than they did in 2025. The concern among analysts is less about this quarter’s £8 and more about what it signals for the months ahead, since insurers tend to move prices in the same direction for several quarters once a trend establishes itself.

Younger drivers, drivers in cities with higher claims frequency, and owners of cars in higher insurance groups are typically the first to feel a reversal like this, because their premiums carry a bigger loading to begin with and insurers adjust those loadings more aggressively when claims costs rise. Drivers with a clean record on a mid-range family car are more likely to see the rise arrive gradually over several renewals rather than all at once.

Why Premiums Are Turning

Insurers price a policy based on what they expect to pay out in claims, plus their costs and a margin, and several of the inputs that pushed prices down through 2024 and 2025 have started to move the other way. Repair costs have kept climbing as cars have become more reliant on cameras and sensors behind bumpers and windscreens, turning what was once a simple bodywork repair into a recalibration job that only a handful of approved centres can carry out. Second hand parts prices and labour rates at approved repairers have also risen, and courtesy car and hire costs during a repair have gone up as well.

Insurers also price in an assumption about how many claims will be inflated or entirely invented, and industry estimates put the cost of that fraud at tens of pounds added to every honest driver’s premium each year. When fraud losses rise, or insurers simply revise their estimate of how much fraud exists, that cost is spread across the whole book of customers rather than isolated to the people committing it.

Can You Avoid the Rise

The single biggest lever any driver has is shopping around at renewal rather than accepting the price an existing insurer offers automatically. Insurers have historically priced new customers more competitively than returning ones, and while regulatory changes were brought in specifically to stop insurers charging loyal customers more than new ones for the same risk, gaps and inconsistencies in how that rule is applied mean comparing the market at renewal remains the most reliable way to find a lower price, rather than trusting that an existing insurer is offering their best rate by default.

Increasing a voluntary excess, paying annually rather than by monthly instalments where the cost allows it, and adding an older, more experienced named driver to the policy can all reduce the headline premium, though each comes with a trade off worth setting against the saving. Fitting a telematics or black box device appeals to insurers because it gives them real driving data rather than a broad assumption based on age and postcode, and it can produce a meaningfully lower quote for drivers confident in their own habits, especially younger drivers who are otherwise charged a heavy age-based loading regardless of how carefully they actually drive.

Drivers should also check that their car is recorded accurately with modifications, mileage and parking location all kept up to date, since quotes generated on outdated details are not a fair comparison and can invalidate a claim later if a genuine discrepancy comes to light. A change as simple as moving the car from street parking to a driveway, where that has actually happened, can shift a quote noticeably.

What to Watch at Your Next Renewal

The safest assumption for anyone renewing in the next few months is that last year’s premium is no longer a reliable guide. Getting a comparison quote around three weeks before renewal, rather than on the day the reminder letter arrives, gives enough time to switch providers without a lapse in cover, and it is the single step most likely to offset at least part of the rise that this quarter’s data confirms is now under way.

How the Index Is Actually Built

The figures behind this quarter’s rise come from an index built on hundreds of thousands of quotes generated through Confused.com’s own comparison site, weighted and analysed by Willis Towers Watson to smooth out seasonal noise and one-off spikes from any single insurer. That scale is what makes the index a more reliable signal than any individual driver’s renewal letter, since one person’s premium can jump for reasons specific to their own claims history, postcode or change of car, while the index tracks the market as a whole moving in one direction.

It is also why insurers, brokers and the Treasury all pay close attention to the same quarterly release. A market-wide turn from falling to rising prices tends to show up first in indices like this one, well before it is visible in official inflation figures, because premiums are repriced far more frequently than most household bills and insurers adjust quickly once claims data starts moving against them.

Drivers who track their own renewal price year on year, rather than only glancing at whether this year’s figure is higher or lower than last year’s, get the clearest personal read on where they sit relative to the market. A driver whose own premium rose by more than the £8 average this quarter is paying above the trend and has more room to negotiate or switch; one whose premium barely moved is already closer to a competitive rate and has less to gain from shopping around immediately, though it remains worth checking regardless given how quickly things can change from one renewal to the next.

What History Suggests Happens Next

Insurance pricing cycles rarely reverse after a single quarter of movement in either direction. The nine consecutive quarters of falling prices that preceded this rise were themselves the tail end of a longer cycle that began after premiums peaked at £995 at the end of 2023, driven down as insurers competed harder for market share once claims inflation eased from the extremes seen during and after the pandemic. If the market now follows the same pattern in reverse, drivers should expect several more quarters of modest increases rather than a single sharp jump, which is a more manageable prospect for household budgets but still adds up over a year of renewals across a family with two or three cars insured.

The practical takeaway for anyone with a renewal due in the next six months is to treat the comparison step as routine rather than optional, in the same way many drivers already treat an MOT or a service reminder. A market moving gently upward rewards the driver who checks every year far more than one moving steadily downward, where even a lazy renewal still tends to land lower than the year before. That cushion has now gone, at least for the time being, and the £8 rise confirmed this quarter is the clearest signal yet that the easy years of automatic savings are behind us.

Sources:

• Actuarial Post: Car Insurance Premiums First Quarterly Rise in Over 2 Years