Car insurance costs continue to drop in 2025
Analysis shows that the average cost of an annual car insurance policy has dropped to £400*, the lowest in two years, and 3.5% lower than the previous quarter
Go.Compare’s latest car insurance price index has revealed that the average cost of a car insurance policy between July and September 2025 was £400, £14 cheaper than the previous quarter and the lowest since 2023.
The newly published price index also found that when it comes to the different types of car insurance, the cost margins are very small. In fact, this quarter there was just £1 difference between the cost of an annual third party, fire and theft (TPFT) policy and a fully comprehensive annual policy, with a TPFT policy being the cheapest cover available this quarter at £399**.
When it comes to the most expensive cover, despite being the most basic policy available on the market, third-party only (TPO) had an average annual cost of £533. Despite being the most expensive option, it has also seen a slight drop since the previous quarter, when the average annual cost was £559.
Where you live has a significant impact on your insurance premiums, but again, this quarter has seen those average prices drop throughout the UK. Those living in Greater London paid the most for their car insurance, with an average annual cost of £575*** - 4% lower than the previous quarter's annual average of £598. Meanwhile, drivers in Wales have the cheapest car insurance quotes in the UK, with an annual policy coming in on average at £324 a year. This cost is £19 cheaper than in the previous quarter, and 84% cheaper than for drivers in London. This price difference is usually because insurers consider drivers who live in and around the capital to drive in heavier traffic and to be more at risk of having their car damaged or stolen than drivers who live in Wales.
Tom Banks, spokesperson for Go.Compare Car insurance, said of the latest figures: “It’s great for motorists that this downward trend in car insurance prices is continuing into the middle of 2025. Let’s hope it continues for the next quarter, so more drivers can take advantage of the reductions, no matter what time of the year their car insurance is up for renewal.
“Car insurance is a significant part of a driver’s annual spend, and that’s why it’s so important to shop around when your car insurance comes up for renewal, even if your renewal quote is cheaper than your premium from the year before.
“Insurers take into account many different risk factors when it comes to pricing car insurance cover – things like where you live, the car you drive, the miles you drive, as well as your occupation. So, rather than auto-renewing or sticking with the same insurer year-in year-out, pop your details into a comparison website and take a look at what the market is doing – you might be pleasantly surprised.
“You can compare the different levels of cover, what you want from your car insurance policy, and whether bundling extras such as breakdown cover could save you money in the long run. Very rarely are two car insurance policies the same, that’s why it’s important to evaluate what is important to you and what will give you peace of mind and buy a policy that suits your needs and your pocket.”
For more tips on how to save money on your car insurance policy, visit here.
To read the full report on the cost of car insurance visit here.
Contact Information
Rubie Barker
Notes to editors
* Based on the median premium of car insurance sales made through Go.Compare for dates between 1 July 2025 and 30 September 2025 inclusive for payment type "annually".
** Based on the median premium of car insurance sales made through Go.Compare for dates between 1 July 2025 and 30 September 2025 inclusive for payment type "annually" broken down by cover type.
*** Based on the median premium of car insurance sales made through Go.Compare for dates between 1 July 2025 and 30 September 2025 inclusive for all policy types and payment type "Annually" broken down by region.
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About Go.Compare
Go.Compare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.
It does not charge people to use its services and does not accept advertising or sponsored listings, so all product comparisons are unbiased. Go.Compare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.
When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. It is this approach to comparing products that secured the company an invitation to join the British Insurance Brokers’ Association (BIBA) in 2008, and it is still the only comparison site to be a member of this organisation.
Go.Compare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest and works with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.
Go.Compare is part of Future Plc and is authorised and regulated by the Financial Conduct Authority (FCA). More information can be found here www.gocompare.com or here https://www.futureplc.com/brands/