The number of motorists driving without valid insurance cover fell to 1.5 million last year, down 20% from 2005, according to figures released by Motor Insurers' Bureau.
The UK has the highest number (4%) of uninsured motorists in Western Europe, the figures indicate, causing concerns over increasing cost of policies for insurers.
Over 160 people are killed and 23,000 injured every year by uninsured drivers in the UK, bringing an additional cost of around £500 million in total, or £30 to the cost of policies for every honest motorist.
Four of five top hotspots for uninsured drivers between 2007 and 2009 were in Birmingham, with Small Heath leading the list, followed by Bordesley and Saltley.
Barkerend in Bradford topped the list of places with the highest number of uninsured drivers between 1997 - when the Motor Insurers' Bureau first collected data - and 2009.
West Gorton in Manchester, and Small Heath in Birmingham occupied the second and third spots.
The highest number of uninsured vehicles in terms of police forces was reported in the Metropolitan area, with an estimated one in 10 motorists in the capital not having insurance.
© Press Association 2010