Motorists across the UK have been handed a lifeline after research found they are paying far less for car insurance than two years ago, with average premiums falling by £217.
New data from Compare the Market found that the typical cost of car insurance has dropped from £810 in June 2024 to £593 in June 2026.
This marks a fall of 26 per cent over two years, with prices also lower than last June, when the average premium was £636.
The latest figures have been seen as welcome news for drivers, particularly as the cost of running a car continues to rise.
Separate research from Compare the Market found that motorists are now spending around £149 more a year on petrol than they were 12 months ago.
However, insurance prices remain slightly above their recent low, as the average premium reached £589 in January 2026.
London and North West England have seen the biggest drop in insurance costs, with premiums dropping by 31 per cent over the past two years.
East Anglia saw premiums fall by 28 per cent, from £774 to £552, while almost every part of the UK has seen insurance costs fall since June 2024.
Northern Ireland was the only exception, with average premiums increasing by two per cent to £760.
Young motorists have seen the biggest reduction in cash terms, with drivers aged between 16 and 24 paying £494 less on average than they were two years ago, representing a 27 per cent fall.
However, younger drivers still have by far the highest insurance bills, with the average premium standing at £1,314. In comparison, motorists aged between 65 and 79 pay an average of just £338.
Motorists aged over 80 saw the smallest cash reduction, with their average premium falling by £100 to £545.
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London remained the most expensive part of the UK for car insurance, despite its large fall in prices. People in the capital pay an average of £962, followed by Greater London at £912.
The cheapest premiums can be found in the South West, where drivers pay an average of £469 – hundreds of pounds less than what those in London pay.
Sam Wilson, insurance expert at Compare the Market, said: “Our research shows that motorists comparing quotes through Compare the Market are seeing lower insurance costs than they were two years ago.
“Premiums have fallen significantly over that period, with many drivers now paying close to some of the lowest prices we’ve seen in over two years.”
But Mr Wilson warned that prices could start rising again due to recent inflationary pressures, “so drivers shouldn’t assume costs will keep falling”.
He said younger motorists and London drivers had seen some of the biggest improvements, but warned that insurance remained expensive for these groups.
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