Car insurance premiums may go down for a number of reasons. The age of the driver is one of the main factors in the lowering of car insurance rates. But then the question remains: at what age do car insurance premiums go down? Typically you’ll see a significant decrease in your insurance rates when you reach 25.
If you’re wondering if your insurance premiums will be lower at 25, this article helps you to find out more. Scroll to the end!
At What Age Do Car Insurance Premiums Go Down?
You might wonder about at what age do car insurance premiums go down?. Typically your car insurance premium will be significantly decreased when you hit 25. Yup, car insurance becomes more affordable at the age of 25 as long as the driver has a clean driving record. You may even get a lower insurance rate before you turn 25.
Several insurance companies have their premium deduction policies based on age and driver’s history. Average insurance will go down every year for drivers between the ages of 16 and 24. It means the average cost of insurance for young drivers is relatively high.
However, your car insurance does not automatically decrease when you’re 25. If it turns out that your driver’s record shows violations such as speeding tickets or accident history, it will continue to increase your insurance rates.
Average Car Insurance Rates by Age
We make a list of average annual and monthly rates for a full coverage car insurance policy by driver age under clean driving records. Here we go!
- 16: $6.779 (annual) and $565 (monthly)
- 17: $5.855 (annual) and $488 (monthly)
- 18: $4.931 (annual) and $411 (monthly)
- 19: $4.375 (annual) and $364 (monthly)
- 20: $3.820 (annual) and $318 (monthly)
- Age 21: $2.708 (annual) and $226 (monthly)
- Age 22: $2.261 (annual) and $188 (monthly)
- Age 25: $1.929 (annual) and $161 (monthly)
Based on the information above, the annual rate of car insurance for a 25-year-old is $1.929 on average. On the other hand, the average annual car insurance rate for a young driver at age 16 is $6.779.
Meanwhile, the monthly average shows the same difference by age. A younger driver at 16 pays an average of $565 and $364 at 19. It goes down to age 25 who only pays an average of only 161 for full coverage monthly.
Compare Annual Auto Insurance Rates Company by Age
Some insurance companies have different percentage decreases at the age of 25. For example, Geico’s auto insurance policy has a 7% decrease for drivers at 25. However, State Farm offers 13% for the average rate at 24 and 25. See the details below:
- 24-year-old average rate: $1.747
- 25-year-old average rate: $1.673
- Percentage decrease: 4%
- 24-year-old average rate: $2.266
- 25-year-old average rate: $2.100
- Percentage decrease: 7%
- 24-year-old average rate: $2.992
- 25-year-old average rate: $2.655
- Percentage decrease: 11%
4. State Farm
- 24-year-old average rate: $3.091
- 25-year-old average rate: $2.688
- Percentage decrease: 13%
Among the four insurance companies above, State Farm and Progressive are a good choice if you want your insurance premiums to drop when you are 25. But make sure to check further with the insurance company about the policy.
Why Do Car Insurance Premiums Decrease with Age?
It’s true that car insurance premiums can go down as you age. It will apply only to drivers with a clean driving record. Additionally, auto insurance rates will start to decrease every year when you renew your premiums and you have not filed a claim yet.
Age is one of the criteria that insurers use to determine risk. Not only that, but insurance companies also consider the driver’s age in calculating credit history, driving record, insurance location, and the number of people in your policy.
Your car insurance premiums may go down as you get older because you are considered lower risk to insure. In other words, teenage drivers are potentially at greater risk of claiming insurance. However, drivers at the age of 25 and above are more mature behind the wheel.
Moreover, car insurance rates also have more to do with the number of years you’ve owned the license. For example, if you just got your driver’s license at 26, then you will be considered a new driver. As a result, you need to pay more for car insurance than a 26-year-old with driving experience from a young age.
Other Factors that Make Car Insurance Premiums Go Down
In addition to age, the rate of car insurance drops can be caused by other factors, including:
1. Driving Record
A driving record is intended to keep track of violations for drivers. It includes information about accidents, speeding tickets, license suspensions, mailing addresses, and more. If you have a clean driving record, your insurance premium can go down even though you are under 25.
2. Educational Level
Education level can also be a reason for lower car insurance rates. A driver who has a bachelor’s degree, master’s degree, or Ph.D. is likely to earn lower auto insurance costs than one who does not have an advanced degree.
3. Marital Status
Some insurance providers will consider your marital status when determining the auto insurance cost. The insurance company thinks married drivers are more financially stable than single. In addition, these drivers tend to drive more safely.
4. Credit History
Another factor that affects the decrease in car insurance premiums is credit history. A driver with bad credit tends to file insurance claims more often. That’s what makes car insurance rates more expensive. While insurance rates can be affordable for drivers who carry a good credit history.
The last aspect that makes car insurance premiums go down is where you are currently living. Insurance premiums will vary, depending on your location. For instance, a driver from a more populated area with higher crime rates.
Wondering At What Age Do Car Insurance Premiums Go Down?
The insurance premiums will go down each year for drivers at 25, but it doesn’t necessarily drop as soon as you turn 25. However, each insurance company also has a different percentage decrease. You can ask your insurance company regarding the decreased rates for further information