Premiums were flat to falling until January. All of the inflation has come since, and new market entrants are the only thing holding prices down.
Car insurance premiums have reversed sharply out of last year’s period of falling prices, with quoted premiums now 9.7% higher than twelve months ago, according to the latest Consumer Intelligence Car Insurance Price Index.
The pace of that turnaround is the story. As recently as January, Consumer Intelligence was reporting annual deflation of 3.3%. Premiums have risen 10.3% in the six months since, and the average Rank 1-5 new business quote on the price comparison websites now stands at £1,184.
“The market has turned decisively, and it has turned fast,” said Laura Vas, Senior Insight Analyst at Consumer Intelligence. “Twelve months ago we were reporting falling prices. Drivers renewing today are walking into a market that has moved almost 10% against them in half a year, and for young drivers it is considerably worse than that.”
Young drivers hit hardest
Under-25s saw quoted premiums rise 18.7% over the year, close to four times the 4.9% increase recorded for over-50s, and well ahead of the 10.2% seen by drivers aged 25 to 49.
The gap widened further in the most recent quarter, when under-25s’ cheapest quotes rose 14.8% in three months. For the youngest drivers, most of the year’s inflation arrived in the last twelve weeks.
That compounds an already stark affordability divide. The average quote for an under-25 is £2,583, against £754 for an over-50. In July, 80% of over-50s could source a quote below £750 from the comparison sites. Only 32% of under-25s could do the same.
“There is a real risk of young drivers being priced out of the market at exactly the point they need cover to work, study or care for family,” said Vas. “The headline figure of 9.7% describes an average driver who does not really exist. What a 20 year-old is experiencing and what a 60 year-old is experiencing are two different markets.”
Nowhere in Britain escaped
All eleven British regions recorded annual premium inflation, and all eleven recorded quarterly increases.
Scotland (+17.8%) and London (+17.6%) led the annual rises. At the other end, only the North East held below 5%, at +4.0%.
London remains the most expensive place in Britain to insure a car, at an average Rank 1-5 premium of £1,502. Wales, at £857, has slipped below the South West to become the cheapest region.
New entrants are the only brake on prices
The single factor holding the market back from a steeper rise is the arrival of new capacity.
Products less than a year old accounted for almost 20% of those actively quoting on the comparison sites in July, displacing established players from roughly 10% of the top-ten positions they held a year ago. Consumer Intelligence estimates that products under two years old have suppressed movement in the cheapest five premiums by 1-2% across 2026.
“Without the pricing pressure from new market entrants, this increase would have been steeper still,” said Vas. “That is a fragile source of relief for consumers. These are products without established books of business, and how they price once they have claims experience to work from is the question that will shape the next twelve months.”
Telematics moves beyond the young driver market
Telematics providers delivered 19% of the five cheapest quotes in July, up two percentage points on April, and the growth came from outside the demographic the technology is usually associated with. Share rose among drivers aged 25 to 49 and among over-50s, while holding flat among under-25s, where telematics already accounts for 40% of the cheapest quotes.
“Telematics is steadily becoming less of a young driver product,” said Vas. “Providers are recognising that the case for pricing on actual driving behaviour is just as strong at 60 as it is at 20.”
The full July 2026 Car Insurance Price Index includes the complete regional breakdown, premium distribution by age band, the long-term index back to 2013, and provider-level analysis of which brands gained and lost competitive share this quarter. Complete the form below to download your copy.
The Consumer Intelligence Motor Competitive Index tracks the cheapest five average quoted premiums per risk on each price comparison website each month, measuring changes in competitive pricing across a consistent basket of approximately 3,600 risks. The index has been running since October 2013. Data is drawn from PCW market activity and provides an independent measure of pricing trends across the UK car insurance market.