At What Age Do Car Insurance Rates Go Down?

• A number of factors influence car insurance premiums, including age. Young drivers pay the most for auto insurance of any other age group. In particular, insurance rates for young male drivers are the highest.
• When looking at car insurance by age, teen drivers will pay the most, but also see the steepest premium drops each year. Significant drops usually happen at ages 19, 21, and 25.
• As long as you have a clean driving history, you’ll enjoy much lower rates between ages 30 to 60.

If you’re under 25, or someone in your household is, find out more about when to expect rates to drop.

If young drivers maintain a driving record free of at-fault accidents and violations, their cost of car insurance will go down each year—usually significant drops happen at age 19 (23 percent), age 21 (18 percent), and age 25 (11 percent).

Rates often continue to decline when drivers enter their thirties. From ages 40 to 60, average premiums decrease by around $100 for each decade, as long as you maintain a clean record.

Does car insurance go down at 25?

Yes, many drivers see a noticeable drop in car insurance premiums at age 25. That’s because insurers view 25-year-olds as lower-risk compared to teens and early twenty-somethings. To maximize savings, maintain a clean driving record and consider bundling policies or enrolling in a telematics program.

Men pay more than women for car insurance, especially at younger ages. Historical data shows that men, especially at younger ages, tend to be riskier drivers.  According to the Insurance Institute for Highway Safety, men are more likely to exhibit risky driving behaviors, like not using seat belts, driving while under the influence, and speeding. They also end up in more fatal accidents than women.¹ For that reason, women tend to see larger rate reductions than men, even as teen drivers.

As drivers age, the difference is less significant. Once drivers reach age 25, there’s only a 4 percent difference in premiums between genders.

In the following states, it is illegal to use gender when determining auto insurance premiums:

• California
• Hawaii
• Massachusetts
• Michigan (in certain areas)
• Montana
• North Carolina
• Pennsylvania

Between age 16 and 25, auto insurance premiums decrease by an average of about $4,000 annually in total, or by $337 monthly. Exactly how much you pay depends on a number of factors, such as vehicle type, ZIP code, and driving history.

Why Car Insurance Drops So Much for Drivers at Age 25

Insurance companies classify young drivers as high risk, due to their inexperience and increased likelihood of exhibiting unsafe driving behaviors (e.g., distracted driving). As you get older and gain more experience behind the wheel, insurance companies consider you a lower risk to insure, which causes your premium to drop.

If your insurance didn’t go down when you turned 25, there are a few factors that could be at play:

• Driving history: At-fault accidents, speeding tickets, and other violations will all increase your premium.
• Credit: People with bad credit are statistically more likely to file claims, which is why low bad can increase premiums.
• ZIP code: In areas with high rates of theft or vandalism (cities often fall in this category), customers pay more for insurance.
• Insurance history: If you have a history of not paying your premium or there was a period of time when you didn’t have insurance (even if you didn’t own a car), you’ll pay more.

How to Get Cheaper Car Insurance as a 25-Year-Old Driver

To save on car insurance as a young driver, try the following:

1. Change your coverage levels. If you drive an older vehicle (typically older than 15 years old), it may not make sense to carry comprehensive and collision coverage. Dropping these coverages will lower your premium significantly, but keep in mind that if someone steals your car or you total it in an at-fault accident, you’ll have to pay for a replacement vehicle out of pocket.
2. Increase your deductibles. The higher your deductibles are, the lower your car insurance premiums will be. Make sure you can afford the higher deductible in the event of an incident.
3. Switch to a pay-per-mile plan. If you drive infrequently (e.g., you work from home), a pay-per-mile plan may be cheaper than a traditional plan. With these plans, you typically pay a base monthly rate plus a per-mile rate. Consider switching if you drive less than 8,000 to 10,000 miles per year.
4. Switch insurers. Each insurance company uses a unique formula to determine its rates, so some companies are cheaper for young drivers than others. Shop around and get at least three quotes before switching to a new company.

Another great way to save on insurance is to look for discounts. While turning 25 often disqualifies you from receiving a student discount, the following can still lower your premium:

• Telematics: To encourage safe driving habits, many companies offer discounts for tracking your driving behavior (e.g., acceleration, braking, phone use) — including a discount just for signing up.
• Clean record: Having no at-fault accidents, violations, or claims in the past three to five years will lower your premium.
• Bundling: When you buy another policy (e.g., renters insurance) from the same insurance company, you will usually get a discount.
• Preferred payment: Many companies offer discounts for setting up auto-pay, paying your premium in full, or going paperless.
• Affiliation: Some professional organizations and other affiliation groups (including university alumni groups) partner with insurance companies to offer lower rates.

Looking for less expensive insurance? We’ve rounded up the best companies for cheap auto insurance.

There are several reasons why both younger and older drivers tend to pay more for auto insurance.

Why Young Drivers Pay So Much for Insurance

Companies consider young drivers higher risk, and consequently charge them more for insurance, for several reasons. Young drivers:

• Lack experience behind the wheel
• Are less likely to wear seatbelts
• Have higher rates of speeding
• Drive more on nights and on weekends, when most accidents occur

While you’ll generally face higher rates as a teen driver, families can find coverage at the right price with the best auto insurance for teens.

In addition to age, the following factors affect your premium:

• Driving record: A record free of accidents and violations will lower your premium.
• Education: People who hold a bachelor’s degree, master’s degree, or a Ph.D. are statistically less likely to file claims, which translates to lower premiums. College students looking for coverage can also find cheaper rates, since insurers usually provide discounts.
• Marital status: Married couples pay slightly less for insurance than single people.
• ZIP code: If you live in a less populated area with a low crime rate, you’ll pay less for insurance.

While insurance rates are much higher for young drivers, they decrease the most at ages 19 and 21. Among young drivers, men pay higher premiums than women since they statistically display riskier driving habits. You can expect rates to increase again as drivers age, around 65 to 75 years old. To get the cheapest insurance, get multiple quotes before buying a policy.