Average motor insurance premium fell by £56 over past year, figures show

The average motor premium has fallen by £56 over the past year, according to data from the Association of British Insurers (ABI).

Between July and September, the average motor insurance premium was £551 – £13 lower than the previous quarter and £56 lower than the same period in 2024.

The ABI’s motor insurance premium tracker is based on prices paid by motorists rather than quotes and analyses nearly 28 million policies sold per year.

Motor insurance premiums have fallen each quarter so far in 2025, both on a quarterly and an annual basis.

Although premiums have eased from their peak, claims pressures remain, the ABI said, with its members paying out £3 billion in car insurance claims during the third quarter of the year. Repair costs accounted for around two-thirds (64%) of the claim figure, as the complexity and cost of fixing modern vehicles remains high, it added.

Advanced electronics, integrated sensors and smart systems make even minor car repairs more specialised, time-intensive and costly, the ABI said.

High-value components and tech are also making vehicles an attractive target for thieves. The cost of theft-related claims totalled £142 million in the third quarter of this year.

Chris Bose, director of general insurance policy at the ABI, said: ”Three straight quarters of falling motor premiums will be welcome news for drivers and the industry alike. However, these continue to be tough times for many families facing higher cost-of-living bills, and underlying pressures on claims haven’t gone away.”

Anyone concerned about the cost of their motor insurance should speak to their insurer to explore what support or options might be available, the ABI said.

Options such as increasing the insurance excess, improving vehicle security, or opting for a telematics policy may help to bring costs down, as well as shopping around for a suitable and cost-effective deal.