October 14, 2021
Agency
Does Car Insurance Go Down at Age 25?
As a young driver, do you ever wonder ” when will my insurance finally cut me a break?”
If so good news, they might have a special birthday surprise for you!!! Car insurance does go down at age 25. The average price of car insurance for a 25-year-old is $3,207 for an annual policy. By contrast, drivers pay an average of $7,179 at 18 and $4,453 at 21 — which demonstrates that car insurance does go down as you age. However, this milestone isn’t as magical as you might think. Yes, car insurance for drivers under 25 is more expensive. But the difference between how much 24-year-olds and 25-year-olds pay on average for car insurance is relatively small — only 11%. Provided you maintain a clean record, young drivers will likely see their car insurance go down after every year driving on the road — but how much it actually decreases by varies from year to year. Auto insurance for 25-year-olds costs $3,207 on average for an annual policy, or $267 per month. That’s only 11% cheaper than the $3,597 ($300 per month) that 24-year-olds pay on average.
The reason why it is more expensive to have insurance as a younger driver is because younger drivers are statistically more likely to get into an accident than older drivers — so they’re riskier for companies to insure. As young drivers get older, the risk they pose to insurers decreases, and insurers reflect this decrease in lowered premiums.
Rates don’t exactly just drop as soon as you turn 25. Other factors can impact 25-year-old car insurance rates. Here are some of the reasons why your rates may not have gone done once you reached age 25:
- Experience: If you’re a new driver at 25 years old (or over) and it’s your first time buying car insurance, then you’ll pay far more than a driver who was licensed at 16.
- Driving history: If you’ve been in an accident or received a speeding ticket, insurers will consider you a more high-risk driver and charge you accordingly.
- ZIP code: If you move to a neighborhood with higher rates of theft and vandalism, then insurers will charge you higher premiums to account for the increased risk of damage or theft.
Fortunately, there are other ways for 25-year-olds to get their insurance rates to go down.
- Don’t purchase unnecessary coverage. Did you buy a shiny new sports car? You will likely pay more for insurance as you’ll want collision and comprehensive coverage that goes with the car’s value. As your car’s value depreciates over time, however, consider reducing or eliminating collision and comprehensive coverage. If your car is only worth a few thousand dollars, it doesn’t make sense to shell out for high premiums to cover an asset of limited value.
- Team up with your spouse. If you’re married and each of you drives separate cars, you may be able to reduce your auto insurance payment. Usually insurers consider married couples more financially stable and risk-averse.
- Shop around for the best deal. Ask about these discounts when you call for a quote. You may be surprised at the savings you’re able to generate simply by asking questions.