UK drivers stick with older cars, switch insurers less

Motor insurance customers in the UK are holding on to older, cheaper vehicles and moving insurer less often, according to new market data from LexisNexis Risk Solutions.

The company's latest Insurance Demand Meter for the first half of 2025 reports that the average value of a car insured in the UK has fallen to around £10,500, while the average vehicle age has edged closer to 11 years. LexisNexis links the trend to cost-of-living pressures and economic uncertainty, which it says are encouraging drivers to delay replacing their cars.

The analysis also indicates a slowdown in the intense shopping and switching activity that characterised the motor market in 2024. Motor insurance pricing eased during the period, and fewer customers changed provider despite continued encouragement at renewal to compare deals.

Shopping for motor cover fell sharply between the first and second quarters of the year. LexisNexis says shopping activity dropped by 9% from Q1 to Q2 2025, and around 20,000 fewer consumers per day searched for motor insurance in the first half of 2025 compared with the same period a year earlier.

The report shows that only 22% of people who shopped around in H1 2025 ultimately switched to a new motor insurance policy. That compares with 25% in the first half of 2024, despite regulatory changes that encourage customers to review their options at renewal.

Older, cheaper cars

The shift in the car parc appears marked over the past 18 months. The average vehicle value in the UK fell by nearly £500 between the second half of 2023 and the first half of 2025, according to the analysis. Vehicle age continued to rise, with the typical insured car now close to 11 years old.

While the overall profile is older, the data points to a modest lift in the share of very new cars. Brand-new vehicles, less than one year old, made up 3.1% of insured vehicles in H1 2025. This was up from 2.6% in late 2023.

LexisNexis notes that premiums across the market softened and stabilised during the period, even as the cost of repairs and claims remained elevated. It warns that rising repair bills and associated claims costs could trigger another shift in shopping and switching behaviour in the coming years.

Competitive balance

The report suggests a more even contest between the largest insurers and their smaller rivals. From the third quarter of 2023 to the third quarter of 2024, the top ten motor insurance providers consistently won more policies than they lost to the rest of the market.

In the first half of 2025 that pattern changed. The rest of the market achieved a 30% increase in net customer gains from larger competitors compared with the same period in 2024. As a result, customer wins between the top ten and other providers became almost evenly matched.

LexisNexis interprets this as a closing gap in customer wins and losses, with smaller brands gaining momentum and the competitive landscape becoming more balanced.

Tom Lawrie-Fussey, Associate Vice President of Product Management, UK and Ireland at LexisNexis Risk Solutions, said market dynamics have shifted since last year's pricing peak.

"Consumer shopping and switching activity in motor insurance has settled below its 2024 peak, as premiums continue to decline and stabilise. Essentially, the motivation to move has decreased for many consumers, although many are still checking what else is on offer, as they are encouraged to do as part of the renewal process. This increased market stability has led to a change in dynamic for policy wins with the rest of the market catching up with the Top 10 insurance providers, after a long period of losses to their bigger rivals. There are some early signs, however, that this situation could change once again in 2026, as motor claims costs remain high," said Lawrie-Fussey.

Fraud and cancellations

The analysis of policy cancellations highlights contrasting patterns between the biggest insurers and others in the market. For the top ten, policies were less likely to be cancelled within the first three months in H1 2025. LexisNexis says this points to stronger risk selection and more stable customer relationships.

Cancellations within three months of policy inception were 29% higher for insurers outside the top ten than for the major providers. This indicates greater early churn for smaller brands.

At the same time, provider-led cancellations among the top ten during the first 15 days of cover rose by more than 23% in the first half of 2025. LexisNexis views this as evidence of quicker intervention when insurers suspect fraud, supported by tighter front-end checks.

Lawrie-Fussey said these patterns align with external indicators on insurance fraud.

"Cancellation patterns show larger insurance providers cancelling fewer policies overall but acting faster to void cover when fraud is suspected. This aligns with the latest motor insurance fraud data from the ABI, which reasserts from application through to claims, fraud detection and prevention rates are increasing. The ABI also reported the insurance market detected 51,700 motor scams in 2024, up 5% on 2023, and prevented an estimated 684,800 fraudulent insurance applications, a 7.4% increase on the year prior. We agree that a combination of better risk selection and quicker intervention is helping these savvy insurance providers stabilise portfolios," said Lawrie-Fussey.

He added that data use will remain central to competitive positioning in the motor market in the coming period. "In today's tough motor market, insurance providers that harness data intelligently to refine pricing, sharpen risk selection and detect fraud will be best placed to thrive," said Lawrie-Fussey.