Help and Contact
Search
Help and Contact

How much is my car insurance going to be?

All of our content is approved by our in-house experts

We want to be as transparent as possible when it comes to our pricing. Your car insurance premium depends on a range of factors, from where you live and the car you drive, to your age and driving history. This guide explains what affects your price, gives you estimates of average UK costs, and shows you how to find a cheaper quote.

What can affect your car insurance price?

Your car insurance premiums are affected by lots of different factors. Here's what matters most.

Your postcode and where you live

Every postcode has its own insurance rating and your premium can change depending where you live. If you live on a main road, your cover will typically cost more than if you live in a quieter area. Higher crime rates and areas with a greater risk of accidents can also increase the rating of an address.

Your postcode is also a good indication of how much a claim could cost. Even if you live in a less busy, more affluent neighbourhood where people might make fewer claims, higher vehicle values can push up claims costs and the cost of your cover. So lower risk doesn't always mean lower premiums.

Your age and driving experience

The more experience you have behind the wheel, the less you might pay for your car insurance, assuming you've built up your no claim discount and don't have any driving history issues. Young drivers can expect higher premiums because they're statistically more likely to be involved in accidents. And it's not just younger drivers – when you start to get older, you might notice the cost of insurance go up as this is also linked to a higher chance of claiming.

useful description of image if informative and not decoration only.

Your no claim discount

Insurers offer a no claim discount to encourage safer driving. If you've managed to build up your NCD, this is a sign you could be a careful driver as you haven't had to claim for any accidents. Your no claim discount can be as much as 30% for one claim-free year and up to 60% for five claim-free years.

The more years you have, the lower your premium is likely to be. However, if you've protected your no claim discount and still have claims or convictions, this will be reflected in your price.

The car you want to insure

The make and model of any car you want to insure can also make a difference to your price. Lots of things are considered, like the car's brake horsepower (BHP), if the car's been modified at all, and how easy it is to source parts for repairs. Powerful cars typically cost more to insure because of higher repair costs and greater risk. The insurance group your car falls into will also affect the price you pay.

Your annual mileage and how you drive

If you need your car for business purposes, it's likely your annual mileage will be higher and you'll be on the roads more. Taking your mileage into account is something you should consider accurately as, statistically speaking, the more you drive, the more likely you are to be involved in an accident.

Who else is on the policy

Having a younger, less experienced driver on your car insurance policy can increase your price. It's the same if you've added someone who's had accidents and claims, or has a conviction on record – they're seen as a higher risk. However, if you're a younger driver, adding a more experienced, safer driver to your policy could help reduce your premium. It's important to check that you and others on your policy are fit to drive. Check out our useful guide for more information on how to check that you're safe to drive.

How much does car insurance cost in the UK?

The cost of car insurance varies depending on lots of factors, but industry data gives us a good picture of what drivers are paying. According to the latest figures, the average UK car insurance premium is around £562 per year. That said, your actual price could be higher or lower depending on your personal circumstances.

What level of cover do you need?

The type of cover you choose also affects your price. There are three main levels:

  1. Third party – the basic legal minimum – covering damage to other people and their property.
  2. Third party, fire and theft – adds protection if your car is stolen or damaged by fire.
  3. Comprehensive car insurance – the most complete level of cover, protecting your own vehicle as well as others.

Interestingly, comprehensive cover isn't always the most expensive. Insurers often price it competitively because drivers who choose it tend to be more cautious.

Why is car insurance so expensive?

Car insurance costs have been rising steadily in recent years, though premiums have started to ease in 2025 and 2026. Several factors continue to push prices up, making cover more expensive for drivers across the UK.

Here's what's driving the cost:

Rising repair costs

The price of parts, paint and materials has gone up significantly, and around 40% of repair work now faces delays in getting parts. Energy costs have also added to every repair bill, and if you need a courtesy car, those costs are rising fast.

Insurers have had to pay out millions in claims due to unpredictable weather over recent years, and this affects premiums across the board.

IPT has upped to 12% since 2015, which has pushed up the cost of cover for everyone, particularly younger drivers and families on lower incomes.

Since 2022, new pricing rules from the Financial Conduct Authority mean insurers can't charge existing customers more than new ones for the same policy. While this protects loyal customers, it's changed how car insurance is priced.

The number of fraudulent claims made against car insurance is significantly higher than with other types of insurance, and this pushes up costs for all drivers.

Understanding these factors can help you see why premiums fluctuate and what's behind the price you pay.

How can I get cheaper car insurance?

Compare quotes and shop around

One of the most effective ways to find a cheaper quote is to shop around and compare prices from different insurance providers. Premiums can vary significantly between insurers, so it's worth using a comparison service to check what's available. When your renewal notice arrives, don't just auto-renew. Even if your renewal price has dropped, you can often beat it by switching. Getting quotes from multiple providers is an easy way to make sure you're getting the best deal for your needs.

Boost your no claim discount

Building up your no claim discount is one of the simplest ways to lower your premium over time. The more years you drive without making a claim, the more you'll save. Insurers reward safe, claim-free driving with significant discounts, so protecting your NCD and keeping your record clean can really pay off in the long run.

Adjust your voluntary excess

Choosing a higher voluntary excess can reduce your premium. Your voluntary excess is the amount you agree to pay towards a claim on top of the compulsory excess your insurer sets. Choosing a higher voluntary excess can reduce your premium, as you're taking on more of the financial risk yourself. Just make sure you pick an amount you could comfortably afford to pay if you did need to claim.

Consider a black box policy

Telematics insurance, often called a black box policy, can be a great option for new or younger drivers looking to prove their skills behind the wheel. A small device monitors your driving habits – things like speed, braking and cornering – and if you drive safely, you could benefit from lower premiums. It's a practical way to show insurance providers you're a careful driver and bring down the cost of your cover.

So, get your Allianz Car Insurance quote today!

Follow us