If you're a young driver, you may be wondering, "At what age does car insurance go down?" Many people believe insurance rates drop when you reach 25, but age isn't the only thing that affects what you pay for car insurance each month.
Although you may notice a drop in your insurance premium once you hit a certain age, this happens for multiple reasons. Insurers calculate your insurance rate based on your assessed risk according to your demographics and where you fit statistically.
Insurance companies want to limit their financial risk, so they charge higher rates to drivers who fall into certain high-risk categories. However, just because you fall into one of these high-risk categories, doesn't mean there aren't still ways to save money.
Insurance rates are highest for new drivers just after they get their licenses, but these rates can go down over time for various reasons, including your increasing age. By looking into the age that insurance rates start to drop, you can plan for your future and learn where to save until you reach the ideal age for insurance.
At What Age Does Car Insurance Go Down?
Car insurance premiums go down yearly for drivers between the ages of 16 and 24. So contrary to popular belief, 25 isn't a magical insurance number where everyone automatically receives a cheaper rate from their insurance provider.
In fact, new drivers will see the biggest drops in their insurance premiums on their 19th and 21st birthdays, with rates continuing to decline until they're 30. After this, rates tend to plateau until drivers reach their 50s or 60s.
Of course, everyone's insurance rates will vary based on a range of factors, including the insurance company they use. Age is just one factor insurance companies consider when determining your insurance premium. Because most drivers get their licenses in their teenage years, they have at least five years of experience driving by age 25, which is one reason this age is often associated with lower insurance rates.
What Factors Affect Car Insurance Rates?
Insurers calculate insurance rates using the following information:
Age
Younger drivers have less experience behind the wheel, which automatically puts them in a higher-risk category. This isn't necessarily because of their age—it's more that they simply don't have as much time on the road. Statistically, young drivers are involved in more accidents than other age groups, so insurance companies charge higher rates to help mitigate their losses.
Gender
Male and female drivers will receive different insurance rates. Men often pay higher rates because, statistically, they're involved in more accidents than women per the National Highway Traffic Safety Administration.
This also means that male drivers under 25 will pay higher rates than female drivers of the same age with a similar insurance policy. However, men receive an average of 12% savings on insurance when they reach age 25, while women only receive average savings of 9%.
Vehicle Type
Regardless of your age, the type of car you drive can significantly affect your car insurance rate. Luxury vehicles and sports cars cost more to replace and repair, so you can expect higher insurance rates if you drive one of these vehicles. Driving a used vehicle that's considered safe by insurance companies can help you save on your insurance bill.
ZIP Code
Where you live is another factor that insurance companies use to determine your insurance premium. If you live in a large city, expect to pay more for your insurance.
This is because there are more cars on the road, which increases the likelihood of being involved in an accident. Additionally, if you live in an area with a high crime rate, you'll likely pay more for car insurance.
Driving History
Keeping your driving record clean is one of the best ways to keep your insurance rate low. Drivers with little-to-no violations against them will be eligible for much better insurance rates than those with moving violations or at-fault accidents on their driving records. When you avoid infractions, you stay out of insurance companies' high-risk category.
Credit Score
If your insurance company looks at your credit score to assess your risk, they will want to see that it's in the good-to-fair range.
If you have bad credit, you'll pay more for insurance. This is because your insurance provider will see you as a risk, as they may believe you won't pay your monthly bill on time.
Marital Status
Another factor that insurance companies look at is your marital status. Married couples are statistically lower risk for insurance companies because they tend to pay their bills on time and avoid making unnecessary claims on their car insurance policies. So if you're married, you could save on your insurance, even if you're under 25.
Can Young Drivers Get Lower Insurance Rates?
Although new drivers fall into the high-risk category for insurers, there are ways to save money on insurance premiums. Consider these tips:
Get Only the Coverage You Need
Your insurance provider may try to sell you additional coverage you don't need. While having more coverage can benefit you, paying only for the coverage you need can save you a lot of money.
For example, you may want to forgo collision coverage if you have an older car, as it probably won't pay to replace your vehicle. Liability coverage is usually the minimum insurance you need in each state.
Get Several Quotes
Before you get insurance coverage, you should get several quotes from various providers. Compare rates and coverages to determine which provides the best deal for you.
When you know what's on offer, you can adjust your numbers to create a policy that fits your budget and coverage needs.
Take a Defensive Driving Course
Taking a defensive driving course could qualify you for a discount through your insurance company.
These classes teach you safe driving techniques and how to react to other drivers on the road. Completing one of these classes demonstrates to an insurance company that you're dedicated to being a good driver.
Consider a Pay-Per-Mile Policy
Some insurance providers, such as Metromile, Allstate, Nationwide, and others, offer a pay-per-mile policy. With a pay-per-mile policy, you only pay insurance for the miles you drive.
Typically, these policies charge you a specified amount per mile, and some companies also limit how many miles you can drive to be eligible for this type of policy. If you don't drive much, this policy can save you a lot of money.
Bundle Multiple Policies
Drivers with multiple types of insurance could save money by purchasing all their insurance policies through the same provider. If you have homeowner's or renter's insurance, you could save if you use the same provider for your auto insurance. Life insurance is another type you could bundle with your car insurance for possible savings.
Drive a Safe Vehicle
Many insurance companies offer discounts if you drive a vehicle with modern safety features. When you're shopping for a vehicle, try to get one with features that can help you avoid an accident.
Newer vehicles offer features such as blind-spot detection, lane-keep assist, and rearview cameras, all of which might look good to insurance companies, depending on your provider.
Allow Your Provider to Use Telematics
Some insurance companies use telematics to track your driving habits. If you allow them to track how you drive, you could qualify for a lower insurance rate. Drivers who demonstrate responsible driving habits through the telematics system will enjoy better rates than those with aggressive and unsafe driving habits. An insurer will often look at your braking and accelerating habits, as well as how far you drive and how often.
Insurance companies like drivers who stick close to home and don't put too many miles on their vehicles. If you accelerate and brake at a moderate rate, this also looks good to insurance providers. Being a responsible driver is one of the best ways to lower your insurance rate.
What Are the Top Rated Insurance Companies for Young Drivers?
As a driver under 25, you can get insurance from any provider that sells insurance in your state. One of the cheapest insurance companies for new drivers is GEICO—a national chain available in every state and Washington D.C. The insurance companies that offer the best discounts when you turn 25 are:
- Progressive: 13%.
- Nationwide: 11%.
- State Farm: 10%.
- GEICO: 7%.
- Allstate: 6%.
Shopping around can help you find a good deal based on your unique circ*mstances. Where you live, work, and drive most often all affect your insurance premium. Your age is just one factor insurance companies look at when calculating your rate.
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FAQs about What Age Car Insurance Goes Down
When your car insurance goes down isn't determined by your age alone. For example, a driver with several tickets or accidents on their driving record may not notice any significant savings just because they turn 25.
Here are answers to some other common questions people have about the age at which car insurance rates go down:
At What Age Is Car Insurance the Cheapest?
Car insurance is most expensive for drivers 18 and under, but the price of your insurance is likely to decrease yearly once you reach 19. Progressive provides a steady decline in insurance rates to drivers over the age of 19.
This decline lasts until drivers reach the age of 75. Seniors will begin to see an increase in premiums, as they move back into a high-risk category.
Why Did My Car Insurance Go Up?
Young drivers who notice their insurance rate go up, or even those over age 30 who see an increase in their rate, may wonder why this happens. Your insurance rate could go up if you get a ticket or if you're in an accident. You become more of a liability the more infractions you have.
If the area where you live becomes a higher crime area, you may also see an increase in your insurance rate. Your credit score, how much you drive, and a change in discounts are a few of the other factors that could cause your insurance premium to go up.
Will My Car Insurance Continue to Get Cheaper?
According to Progressive, your insurance rate should continue to decrease until you reach 75. It peaks at 18 because this is the highest-risk age group based on statistics. You should see at least a slight decrease each year until you're a senior, provided you consistently maintain a clean driving record and pay your bills on time.
At what age car insurance goes down depends on several factors, but you should see your insurance premium start to decline by the time you reach 19, with the decrease becoming less noticeable after you reach 35. In your senior years, you may see your rate begin to increase again.
Steven Glass
Insurance Editor
Steve Glass is a retired insurance professional with over 34 years of experience in the Property & Casualty insurance industry. Over the course of his career he led teams that handled Homeowners and Commercial property and casualty claims, Auto Medical claims, Auto Bodily Injury Claims, Catastrophe claims and Insurance Subrogation recovery efforts. He also has experience as an Insurance Subrogation Arbitrator.
