Introduction
Car insurance has become one of the biggest running costs of owning a car in the UK, and for many used car buyers it now matters as much as the purchase price. Premiums jumped sharply in 2023, eased in 2025 and have been broadly flat in 2026, but claims costs are still climbing, so the pressure has not gone away.
This guide explains where premiums stand, why they rose, how the car you choose and its history affect your quote, and the practical, honest ways to pay less.
Bottom line: insurance can turn an affordable-looking car into an expensive one. Get real quotes on the exact car, by registration, before you commit to buying it.
Where UK Car Insurance Premiums Stand in 2026
The Association of British Insurers (ABI) publishes a quarterly motor insurance tracker based on the price customers actually paid for comprehensive cover, not the price they were quoted.
- In the first quarter of 2024 the average premium paid reached £635, about a third higher than the £478 average a year earlier (ABI, April 2024).
- Prices then eased. The ABI's figures for 2026 put the average at about £560 in the first quarter and £566 in the second quarter, published on 30 July 2026 (Insurance Times, July 2026).
- Over the same period claims kept getting more expensive. Insurers paid out a record £3.2 billion in motor claims in the second quarter of 2026, with the average claim payout rising to about £4,900 (same source).
Averages hide huge differences. Your own premium depends on your age, experience, postcode, claims record, the car, how you use it and where you keep it. Young and newly qualified drivers, and drivers in some city postcodes, routinely pay far more than the average.
Why Premiums Rose So Sharply
Repairs cost more
Modern cars are packed with sensors and cameras. A bumper or windscreen that once was a simple part may now hold radar sensors or a driver-assistance camera that needs calibrating after replacement. Parts prices, paint and garage labour have all risen, and repairs take longer. The ABI has repeatedly pointed to repair costs as a main driver of claim payouts.
Theft
Keyless entry and relay theft have made some models far more attractive to thieves, and a stolen car that is never recovered becomes a total loss for the insurer. Models with high theft rates tend to cost more to insure, and insurers may ask for extra security on them.
Injury claims and fraud
The whiplash reforms that came into force in May 2021 introduced fixed tariffs for minor road traffic injuries, but injury claims, legal costs and fraud such as "crash for cash" still add to the overall cost that insurers spread across all policyholders.
Electric cars
Electric cars can cost more to insure than comparable petrol cars. They are often worth more, repairs to the battery or high-voltage system need specialist skills, and an insurer may write off a car if it cannot be sure a damaged battery is safe. The gap varies a lot by model, so get quotes rather than assuming.
Insurance Groups: The Number to Check Before You Buy
Every car model sold in the UK is placed in an insurance group from 1 (cheapest) to 50 (most expensive). Groups are set by an industry panel using data from Thatcham Research, and they reflect things like:
- the cost and availability of parts
- how much repairs cost and how long they take
- performance
- security and theft risk
- the car's value when new
- safety technology
The group is set for the exact version of the car, so two cars that share a model name can sit in very different groups. A small hatchback with a modest engine may be in single figures, while a fast or premium version of the same model can be many groups higher. Look up the group for the exact version you are considering, and then get a quote.
For example, a buyer choosing between two £15,000 cars, one quoted at £920 a year and the other at £740 a year, would pay £900 more to insure the first over five years if those quotes stayed the same. Prices change every year, but the principle holds: the "better badge" can cost real money.
How a Car's History Affects Your Insurance
Write-off categories
A car that has been written off and repaired carries its category for life. Cat S means it had structural damage; Cat N means the damage was non-structural. (These replaced the old Cat C and Cat D in October 2017.) You must tell your insurer if a car has a write-off category. Some insurers will charge more, some will decline, and the car is usually worth less if it is written off again. See our write-off check for more.
Theft records
A car recorded as stolen is a far bigger problem than an insurance quote. If you buy a stolen car, you generally do not become the legal owner and it can be taken back by the police or the insurer that paid out for it, leaving you to recover your money from the seller. Our guide to buying a stolen car in good faith explains the position.
Outstanding finance
If a car is still on hire purchase or conditional sale, the finance company owns it until the agreement is paid off. A private buyer who buys in good faith without knowing about the agreement is usually protected by the Hire Purchase Act 1964, but it can still mean a dispute with the lender, so it is far better to check first. Read more in our guide to buying a car with outstanding finance.
Modifications
Any change from the factory specification, from a remap or lowered suspension to larger alloy wheels, can affect your premium and must be declared. A previous owner may have made changes that are not obvious, so look carefully and ask. An undeclared modification can lead an insurer to reduce or refuse a claim.
Mileage
Look at the mileage recorded at each MOT on the free GOV.UK MOT history service. If the readings jump or fall in a way that does not make sense, ask why before you buy.
Check the car before you get quotes. A Carhealth full report shows write-off, stolen and finance records from Experian, the MOT history from DVSA and the mileage recorded at MOT tests and in past adverts, with instant results.
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12 Honest Ways to Cut Your Premium
1. Choose a lower insurance group
This is usually the biggest single lever you have when buying. Decide on a group budget before you start looking.
2. Get quotes before you buy
Run quotes on the exact registration of the car you are considering. It takes a few minutes and can stop you buying a car you cannot afford to insure.
3. Compare every year
Since 1 January 2022, FCA rules have banned "price walking": an insurer cannot charge a renewing customer more than it would charge an equivalent new customer through the same channel (FCA policy statement PS21/5). That does not mean your renewal is a good price. Premiums can still rise, and another insurer may be cheaper, so compare before you renew.
4. Shop a few weeks before the start date
Leaving it to the day before gives you no time to compare, and some insurers price very last-minute buyers higher. Start looking three to four weeks before you need cover.
5. Think about your voluntary excess
A higher voluntary excess usually lowers the premium, but only choose an excess you could actually pay if you needed to claim. Remember it is added to any compulsory excess.
6. Pay annually if you can
Paying monthly is often a form of credit and can cost noticeably more over the year. Check the total amount payable and the APR on the quote before choosing monthly payments.
7. Declare your mileage accurately
Estimate your annual mileage honestly from your MOT records or past use. Overestimating costs money; underestimating can cause problems with a claim.
8. Describe your job accurately
Your job title must describe what you actually do. Under the Consumer Insurance (Disclosure and Representations) Act 2012, if you carelessly or deliberately give wrong information, the insurer may reduce a claim payment or refuse it. If your role genuinely fits more than one standard title in the insurer's list, it is fine to choose the one that is most accurate, but do not pick a different job because it is cheaper.
9. Consider telematics
A black box or app-based policy prices your cover partly on how you drive. It can help young drivers in particular, but there may be conditions such as curfews, and poor driving can increase the cost.
10. Add an experienced named driver (honestly)
Adding an experienced driver can reduce some quotes for young drivers, but not always. Never put a policy in an experienced driver's name when you are the main driver. That is "fronting", and it is fraud.
11. Improve security and parking
Where you keep the car overnight affects the price. Only declare a garage or driveway if that is genuinely where the car is kept. An approved alarm, immobiliser or tracker may help on some models.
12. Keep the car standard
Avoid modifications if cheap insurance is your priority, and declare any that are already on a car you buy.
Young Drivers
Young and newly qualified drivers pay the most because, statistically, they are more likely to be involved in a crash. The most effective steps are usually:
- Choose a small car in a low insurance group with a modest engine.
- Get telematics quotes as well as standard ones.
- Compare quotes widely and pay annually if possible.
- Be wary of advice to "build a no-claims bonus as a named driver". As a named driver you do not earn a no-claims bonus of your own. Some insurers do give a discount for claim-free experience as a named driver, so ask about it, but it is not the same as an NCB.
- Never let a parent insure the car as the main driver when you are the one who drives it.
FAQs
Why is my quote so high when I have never claimed?
New drivers start with no no-claims bonus, and price also depends on your age, experience, postcode and the car. Your bonus builds with each claim-free year on your own policy.
Does getting quotes affect my credit score?
Quote searches by comparison sites and insurers are usually soft searches, which other lenders cannot see. Check the insurer's terms if you are unsure.
Can I drive my parents' car?
Only if you are named on their policy or the policy covers any driver. Do not assume a "driving other cars" extension covers you; where it exists, it usually applies only to the policyholder and often only third-party cover.
Is an older car cheaper to insure?
Often, because it is worth less, but not always. Group, theft risk and parts costs still matter. Get quotes on the exact car.
Why did my renewal go up when I have not claimed?
Claims costs across the market have risen, and insurers reprice every year. The FCA rules mean your renewal cannot be higher than the same insurer's price for an equivalent new customer through the same channel, but other insurers may still be cheaper, so compare.
What happens if I do not declare modifications?
The insurer may reduce or refuse a claim, or cancel the policy. Declare everything.
Is gap insurance worth it?
If you buy a car on finance, gap insurance can cover the difference between what your insurer pays if the car is written off and what you owe or paid. Read the terms and compare prices, as you do not have to buy it from the dealer.
Conclusion
Average premiums in 2026 are below their 2024 peak, but claims costs are still rising and your own price can be far from the average. The car you choose is the factor you control most when buying: check its insurance group, get quotes on the exact registration, and check its history before you hand over any money.
Check the car for write-off, stolen and finance records before you buy, and see what a full report includes.