Car insurance premiums seem to be more variable than ever, not just by driver age or occupation, but by city or region. Laura Vas, Senior Insight Analyst at Consumer Intelligence, says the market now appears to be entering a more stable phase following the sharp pricing adjustments seen previously, although pricing conditions remain uneven across age groups and regions.
Here are the details;
Young drivers see prices rise 3.7% in the 12 months to January 2026 while over-50s benefit from 6.7% deflation
• Annual deflation slowed sharply to 3.3% in the 12 months to January 2026, down from 9.1% three months earlier.
• Under-25s remain the only age group experiencing annual inflation, with premiums rising 3.7% in the 12 months to January 2026, while over-50s saw the largest fall at 6.7%.
• Drivers most commonly received a quote between £250 and £499, with 28% of Rank 1-5 quotes falling in this range.
• 65% of drivers were able to source a quote below £750 from PCWs in January 2026, up from 62% in January 2025.
• London (+7.3%) and Scotland (+3.9%) were the only regions to record annual premium increases in the 12 months to January 2026.
The Consumer Intelligence Car Insurance Price Index is the independent authoritative source of price movements in the car insurance market, compiled using real customer quotes from price comparison websites (PCWs). The data is used by the Office for National Statistics, regulators and insurance providers as the definitive benchmark of how price is changing for motorists.
Market stabilises as correction phase eases
Quoted car insurance premiums fell 3.3% in the 12 months to January 2026. This compares to 9.1% annual deflation recorded three months earlier.
In the three months to January 2026, pricing was broadly stable at -0.1%, indicating that the sharp phase of price correction seen previously is no longer evident.
Across the whole market, the average Rank 1–5 new business quoted premium was £1,194 in January 2026 compared to £1,259 in January 2025.
Laura Vas, Senior Insight Analyst at Consumer Intelligence, says:
“The headline suggests stability, but segmentation within the market remains pronounced. The pace of deflation has slowed significantly, and pricing is now plateauing at an overall level rather than continuing the sharp downward adjustment seen earlier in the year.
“We have not observed the large annual rate movements from major groups that characterised previous cycles, and there is currently no clear evidence of a hardening market. However, this relative stability compared to recent years may signal that the softened conditions seen through 2025 are approaching an inflection point.”
Affordability improves overall, but unevenly
Drivers most commonly received a quote between £250 and £499, with 28% of Rank 1-5 quotes falling in this range, and 24% falling between £500 and £749.
In January 2026, 65% of drivers were able to source a quote below £750 from PCWs, up from 62% twelve months earlier.
By age group, 82% of over-50s could source a quote below £750, compared to 65% of drivers aged 25 to 49 and 32% of under-25s.
While accessibility has improved at an aggregate level, the distribution of affordable pricing remains uneven across age groups.
Under-25s remain structurally separate
Premium movements continue to diverge by age.
In the 12 months to January 2026, premiums fell 6.7% for over-50s and 3.2% for drivers aged 25 to 49. Under-25s were the only age group to experience annual inflation, with a 3.7% increase.
In the three months to January 2026, under-25 premiums fell 1.9%, while drivers aged 25 to 49 saw a marginal increase of 0.5% and over-50s were broadly flat at 0.1%.
Vas adds:
“Younger drivers remain on a different pricing trajectory to the rest of the market. Although quarterly movements have eased, they are still the only segment facing upward annual pressure.”
Telematics competition stable, positioning shifts
Telematics providers accounted for 16% of Rank 1–5 quotes in January 2026, unchanged since July 2025.
Telematics competitiveness increased by one percentage point to 15% among drivers aged 25 to 49, while it decreased by one percentage point among over-50s.
The increase among drivers aged 25 to 49 reflected Hastings Direct YouDrive lowering premiums to gain Rank 1–5 share, while non-telematics providers such as Esure and Zego reduced their presence after raising prices.
Among over-50s, YouDrive lost share following a footprint reduction for over-65s, while Direct Line and RAC gained competitiveness after lowering premiums.
Vas comments:
“Overall telematics competition is steady, but small shifts in underwriting footprint and pricing strategy continue to influence which providers appear most competitive across different age groups.”
Regional divergence persists
In the 12 months to January 2026, premiums decreased in nine of eleven British regions. The largest annual reductions were recorded in the North West (-8.6%) and Wales (-8.3%).
London (+7.3%) and Scotland (+3.9%) were the only regions to experience annual inflation.
London now has the highest average Rank 1–5 premium at £1,557, while the South West remains the lowest at £828.
In the three months to January 2026, London and Scotland continued to record inflation (+3.6% and +3.1% respectively), while the North West saw the largest quarterly decrease (-4.0%).
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