Motor premiums fall for third quarter

12th November 2025

Motor insurance premiums in the UK have declined for a third consecutive quarter, according to the latest data from the Association of British Insurers (ABI).

Between July and September 2025, the average premium stood at £551 – £13 lower than the previous quarter and £56 below the same period in 2024.

When adjusted for inflation, the real-terms reduction is even more marked, totalling £79. While this downward trend offers welcome relief for motorists, the ABI has warned that ongoing claims pressures continue to weigh on insurers.

ABI members paid out £3bn in car insurance claims during Q3 2025. Repair costs alone accounted for 64% of that figure – or £1.9bn – as the expense of repairing modern vehicles remains high. Today’s vehicles often feature complex electronics, integrated sensors, and advanced safety systems, all of which make even minor repairs more intricate, time-consuming and costly.

In addition, theft-related claims reached £142m over the quarter, with the value of stolen vehicle components contributing to the challenge. The ABI has highlighted the continued need for collaboration between manufacturers, insurers and policymakers to mitigate vehicle theft and its impact on premiums.

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.

“The industry continues to drive forward its 10-Point Roadmap to help tackle the underlying cost of insurance. Government can back the sector too by investing in training for the repair sector and improving road safety. Crucially, any rise in Insurance Premium Tax in the Autumn Budget risks reversing months of hard-won progress.”

Read the full ABI update here