Vaishali Varu
Car insurance prices are finally falling again after experiencing extortionate hikes last year.
The average cost of car insurance at the end of 2024 was £834, analysis by comparison website Confused.com found.
While this marks a steep annual decline of £161 (-16%) since the staggering peak of £941 at the end of 2023, costs remain well above pre-pandemic lows.
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Inflation and increased claims have kept insurance premiums high. Meanwhile, the cost of driving has crept up with fuel prices being well above the average before 2020.
All this means that, despite a respite from the highs of last year, drivers’ finances remain more squeezed than before.
However, there are ways to cut your car insurance costs, and careful timing could help save the average driver over £150 a year on their car insurance.
When is the cheapest day to buy car insurance?
The cheapest day to buy your car insurance is 26 days before your renewal date, according to research by comparison website Go.Compare.
Purchasing a policy the ideal number of days before renewal costs an average of £390, £164 less than buying it at the last minute.
Here’s how much the cost of your car insurance premium could differ based on the day you book:
Days to policy start date | Median price paid |
|---|---|
0 | £554 |
1 | £511 |
2 | £488 |
3 | £470 |
4 | £461 |
5 | £446 |
6 | £439 |
7 | £432 |
8 | £430 |
9 | £417 |
10 | £419 |
11 | £415 |
12 | £414 |
13 | £415 |
14 | £415 |
15 | £409 |
16 | £401 |
17 | £400 |
18 | £402 |
19 | £401 |
20 | £401 |
21 | £398 |
22 | £400 |
23 | £402 |
24 | £399 |
25 | £394 |
26 | £390 |
27 | £394 |
28 | £399 |
29 | £404 |
Source: Go.Compare, data gathered between January and December 2024
If you choose to renew your insurance a few days prior to or after the 26th day before the deadline, you will be spending extra cash, but not a significant amount more.
On average, car insurance is around £14 more expensive than it could be on the 29th day before renewal, rising to £19 more expensive if you purchase a policy just 15 days before the deadline.
Car insurance costs grow exponentially from 15 days before the renewal deadline, the data shows.
If you book 10 days before the renewal deadline, you face paying an extra £29 for the same coverage, on average, while you can expect to spend almost £100 extra if you wait until two days before.
Renewing the day before the deadline will cost you £121 more, and renewing on the day of the deadline itself will mean you’ll be £164 worse off.
Warning of the risks of leaving your car insurance renewal too late, Tom Banks, car insurance spokesperson at Go.Compare, says: “Many drivers don’t realise that the day you buy your policy can also impact the price.
“Drivers who leave it until the last minute are often perceived as higher risk, which can result in higher premiums. On the other hand, purchasing in advance signals that you’re organised and responsible – traits that insurers reward with lower prices.”
So, 26 days is really the sweet spot – and perhaps a note for your diary. But, it’s important to know there are other factors that come into play when buying your car insurance premium, and there are other ways to cut costs too.
How to cut car insurance costs
There are several ways to cut the cost of your car insurance premium.
Buy an annual policy
If you can afford to pay your policy off in one go, you should. The other option is paying for your premium monthly, but it means interest will be added to your monthly payments, which means you’ll end up paying more.
Build no claims bonus
If you’re wondering how valuable your no claims bonus is, it is quite significant. For each year you don’t make a claim on your policy, your no claims will build up and knock some money off your premium – otherwise known as your no claims discount.
The trade body for the car insurance industry, Association of British Insurers says, while no claims discounts vary from insurer to insurer, they can be as much as 30% for one claim-free year and 60% for five claim-free years.
Be cautious of being a named driver
Being a named driver means adding yourself on someone else’s insurance policy. It means you can also drive the vehicle and you are protected if there’s an accident or damage to the vehicle. Though any claim on the policy would be in the name of the main driver.
Young drivers or anyone starting off can expect high car insurance premiums, as you’re new on the road and you won’t have a no claims discount. In this case, it’s a good idea to add an experienced driver as a ‘named driver’.
Connor Campbell, expert at Independent Advisor Car Insurance said: “Adding a parent with more driving experience to their policy as a named driver will normally see them benefit from cheaper premiums.” But if it is your policy and your car, it’s important to keep yourself as the main driver, as it’s the only way to build your no claims bonus. As a named driver, you don’t get any no claims discount.
Tweak your job title
Job titles can matter when it comes to car insurance premiums. While you shouldn't lie about your job, if you find another description for your occupation, it may be worth comparing quotes.
Always drive while insured
It is important to check that your car is actually insured, and that you haven’t inadvertently invalidated your car insurance.
It is not only against the law to drive without insurance, but accidentally invalidating your insurance could also mean that you are considered an irresponsible driver by providers, meaning they might start charging you higher premiums.
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