How Does Your Postcode Affect Your Car Insurance Costs?

The Postcode Premium Gap

The difference between the most and least expensive areas is staggering. According to research from WTW and Confused in 2025, drivers in West Central London pay an average of £1,410 per year, while those in rural areas like Llandrindod Wells in Wales pay around £557 – that's a difference of over £850.

Research found that Londoners can pay more than double the UK average for car insurance. West London has some of the highest premiums in the country, with residents paying from £1,734 for their cheapest quote, while Galashiels in Scotland has some of the lowest at just £544.

Why Does Your Postcode Matter?

Insurers use your postcode to assess the level of risk in your area. Several factors come into play:

Crime rates: Areas with higher vehicle theft and vandalism see higher premiums. According to 2024 crime statistics, London, the West Midlands, and Bristol have the highest vehicle crime rates in the UK.

Accident frequency: Urban areas with more traffic and congestion typically have more accidents. Insurers look at claim statistics for your area when setting prices.

Population density: Busy city centres with lots of cars on the road mean a higher chance of collisions and claims.

Type of vehicles: Wealthier areas where people drive expensive cars with bigger engines naturally have higher average premiums because claims cost more.

Most and Least Expensive Areas

Research from 2024-2025 consistently shows that:

Most expensive areas:

• Greater London (especially West and Central London)

• Manchester

• West Midlands

• North West England

Least expensive areas:

• Rural Scotland

• Wales

• South West England (Devon and Cornwall)

• Northern Ireland

The pattern is clear: rural areas with lower population density, less traffic, and lower crime rates enjoy much cheaper insurance.

Can You Do Anything About It?

You can't easily change where you live just to save on insurance, but you can take steps to reduce your premium:

• Park your car more securely: If you have access to a garage or private driveway, use it and tell your insurer

• Add security features: Alarms, immobilisers, and tracking devices can lower your premium

• Choose your car wisely: Some cars are cheaper to insure than others, even in expensive areas. See our guide on cheapest cars to insure.

• Increase your voluntary excess: Agreeing to pay more if you claim can reduce your premium

Compare to Find the Best Deal

Because insurers assess postcode risk differently, it's essential to shop around. Use the comparison tool to check quotes from multiple insurers – even if you live in a high-premium area, comparing policies could save you hundreds of pounds. Different insurers have different views on risk, so the prices you're quoted can vary significantly. Taking just a few minutes to compare could help you find much better value, wherever you live.

Your postcode might be beyond your control, but getting the best insurance deal for your area isn't.

Sources

WTW - UK car insurance premiums continue dramatic fall (June 2025) - https://www.wtwco.com/en-gb/news/2025/06/car-insurance-premiums-continue-dramatic-fall-with-teen-drivers-seeing-biggest-savings

GoCompare - The UK's postcode premium hot spots are revealed - https://press.gocompare.com/news/are-you-paying-over-the-odds-the-uks-postcode-premium-hot-spots-are-revealed

Compare the Market - How does my postcode address affect my car insurance? (May 2025) - https://www.comparethemarket.com/car-insurance/content/how-does-my-address-affect-my-car-insurance-premium/

Free Price Compare - Car Insurance Prices in the UK: A Regional Analysis for 2024 - https://freepricecompare.com/car-insurance/guides/car-insurance-prices-by-location-uk-2024/