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Auto Insurance

How Your Age Impacts the Cost of Car Insurance

At What Age Does Car Insurance Go Down?

Because car insurance is an expense that cannot be avoided, you may wonder at what age car insurance goes down. There are a few milestones in which your insurance rates will decrease.

  • When you hit 18 years old
  • When you hit 21 years old
  • When you hit 25 years old

Your car insurance will decrease at each milestone because the insurance companies consider your experience. Hopefully, the longer you have been driving, the less risk you present. 

How Insurance Companies Look at Your Age

Auto insurance providers usually view young drivers under 25 as high-risk. This is primarily due to their lack of driving experience and the assumption that car accidents are more likely to occur. Insurance for teen drivers is particularly expensive.

The good news is that even though you will pay higher premiums from 16-25, you can expect to pay quite a bit less after turning 25. With that being said, as you age, you may experience a rate increase.

In most cases, drivers over 65 experience higher rates than those under 65 due to the potential loss of eyesight, reflexes, and cognitive ability that comes with aging. Insurance companies consider this when setting their car insurance rates, so you can expect that after you turn 65, your rates will increase.

The Average Cost of Car Insurance By Age

Each insurance company will have different rates. Your premiums will also vary based on several factors, including gender, credit, driving history, and marital status. We have computed the average annual rates based on a few carriers’ data.

Age, MaleAverage RateAge, FemaleAverage Rate
15-16$5,12315-16$4,987
18-20$4,94718-20$4,698
21-24$3,79521-24$3,388
25-29$2,40325-29$2,317
30-50$1,30030-50$1,200
55-65$1,80055-65$1,680
75-85$2,06475-85$1,920

What This Means

The average car insurance rates above show that you will pay higher premiums as a teenager. Then, your car insurance premiums will be reduced starting in your early twenties. You will typically see similar rates throughout your 30s and 40s and may begin to see incremental increases after 50.

Are Insurance Rates Different For Male vs. Female Drivers?

While few states do not take gender into account for car insurance rates, the majority do. And, you will find that males tend to pay more in premiums than females.

There are several reasons why car insurance for young male drivers is so expensive. According to AAA’s Foundation for Traffic Safety, men spend more time behind the wheel than women. The National Highway Traffic Safety Administration reports that 76% of fatal crashes among drivers between the ages of 21 and 25 occur among male drivers, while 24% occur among female drivers. Due to this difference in risk, insurers charge male drivers more.

What Else Goes Into Calculating Your Premium

In addition to gender and age, insurers will look at factors like your credit score, where you live, your driving record, and even your claim history. 

Your Credit Score and History

Most states allow insurance companies to use your credit score and history to help determine the rate you will pay. If you have a good credit score and history, you may pay a lower premium than if you have bad credit. Check your credit score and see where you fall:

  • Excellent: 800-850
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579

If you live in California, Hawaii, Massachusetts, or Michigan you can rest assured that your credit score will not be used in factoring your car insurance rates as it is a state law. 

Your Vehicle Details 

The vehicle that you drive is going to help determine the premiums you pay for auto insurance. You will provide the year, make, model, and vehicle identification number to the insurer, and they will run some statistics. If your car is more prone to accidents, you will pay a higher rate.

Also, the value of the car is going to impact the rates as well. Someone who drives a Honda Civic will pay fewer insurance premiums than a Lamborghini due to the difference in value. 

Your Location and Commuting Habits 

The location of your home influences the cost of your insurance. Insurers typically charge more for car insurance for drivers from more populated areas with higher crime rates. If there is a high crime where you live, then the chance of your vehicle being stolen or damaged is higher, creating more risk for the insurance company.

Also, if you commute to work and are on the road more often, you will be considered a higher-risk driver. You can expect to pay a little more than if you were a remote worker. 

Your Lifestyle Details 

No matter the age or status of the driver, insurance providers view married drivers as more financially stable and safer drivers than those who are not. Multi-car discounts are also more likely to be available to married people who have both cars covered under one policy.

If you are an Uber driver or street racer, you can expect to pay much higher rates as well. Some insurance companies will have a hard time wanting to insure you as well, so be sure to consider this when signing up for these types of lifestyle events. 

Your Driving Record

All insurance companies will consider your driving record when setting your insurance premiums. If you have received speeding tickets, a DUI, or any other violations within the last 3 years, it will be seen by your insurance company, and you will pay more premiums. 

At-fault accidents can make your insurance rates go up as well, so you want to avoid those as much as possible by being a safe and aware driver. 

Your Insurance and Claims History

Having a solid insurance history with little to no claims will benefit you when it comes to paying insurance premiums. You will pay lower rates for car insurance if you have had insurance before without a lapse and no at-fault claims. 

On the flip side, if you have had one or more at-fault accidents, a lapse in coverage, or never had insurance before, you can expect to pay a little bit more. 

Your Policy Details

Your policy details are also going to impact your insurance rates. Aside from the vehicles, which we have already discussed will impact your premiums, so will your coverage selections.

  • Coverage Amount: You will choose a limit for your liability; the higher the limit, the higher your premiums will be. However, it is essential to remember that minimum limits are almost never enough to pay for a claim. 
  • Deductible: You will have a deductible for comprehensive and collision physical damage coverage. The higher the deductible, the lower your premium.
  • Optional Coverages: You may add rental reimbursement, towing, and other optional coverages. Each of these will cost you more premium.

8 Ways You Can Lower Your Car Insurance Rate at Any Age — Teens Too 

As with anything else, there are ways to save on car insurance. Regardless of age, you can look at these ways to help lower your premiums. 

1. Put an experienced driver on your insurance 

If you are inexperienced or young, it may be better for you to be on an experienced driver’s policy or put them on your policy. The insurer will see that an experienced driver is on the policy and will look to that driver to mentor you as the inexperienced driver. 

It could also help if they have past insurance history with no claims. Additionally, you could get multi-vehicle discounts if their vehicle is also on the policy.

2. Drive a lower-value car 

A car that is of high value costs more to repair. Because of that, insurers will charge higher rates so that if you have a claim, they can pay it with no issues. If you want to save money on your car insurance, one easy way is to drive a lower-value car. Even if you have your heart set on a particular make and model, consider getting an older year that is used. 

3. Take defensive driving courses to scrub infractions from your record

A defensive-driving course will not only teach you how to drive more safely, but it will also reduce your auto insurance premiums. And, if you have multiple violations, sometimes they will allow you to remove them from your record by doing so. This discount is not available in all states or all insurers. Some states and insurers only offer it to seniors and young drivers under 25. Before you enroll in a class, ask your insurance company if you qualify.

4. Improve your credit score 

Car insurance premiums are affected by your credit score unless you live in California, Hawaii, Massachusetts, or Michigan (where credit is prohibited or limited). Insurance companies charge higher premiums to offset the risk of drivers with lower credit scores filing claims. You may be able to reduce your premiums if you improve your credit score. It can be challenging and time-consuming, and while it may be difficult if you are younger with no credit history, you can try:

  • Paying all of your bills on time
  • Paying down debt
  • Don’t apply for new credit or loans
  • Keep credit cards open with no balance

5. Consider a different kind of car insurance 

Furthermore, every driver has different needs and preferences regarding auto insurance. For example, those who drive an older car with little value may not need physical damage coverage. Also, with technology, insurance companies now offer pay-per-mile insurance. So, if you are a remote worker who hardly drives, that could be an option.

Another great option is an insurer that offers telematics. Telematics is usually a device or an app on your phone that monitors your driving. You could get a discount if you are a safe driver that obeys traffic laws.

6. Make changes to your coverage 

You could make a few changes to your policy that may help lower your premiums. It is important to note that each state has minimum liability limits, so be sure to know yours before making changes. Additionally, if you have a loan or lease on your car, you are likely required to carry physical damage as well.

However, if you can make changes, you should consider increasing your physical damage deductibles. The higher the deductible, the lower your premium. Remember, you have to pay the deductible if there is a claim. 

You could also consider dropping collision coverage on an older vehicle that you would not fix if it were damaged in an accident. 

7. Look for discounts from your insurer 

Be sure to ask for all applicable discounts from insurance companies while you’re shopping around. Each age group will have discounts they can seek out. Despite not being eligible for student-away-from-home or good-student policies, 25-year-old drivers can save on car insurance in several ways:

  • Bundling: Receive a discount for having multiple policies with one insurer. 
  • Good student: If you are a student and have a high grade point average.
  • Paid-in-full: Paying your policy in full could earn you a discount.
  • Accident-free: Most car insurance companies offer a discount for being accident-free.
  • Organizations: You could get a discount for belonging to some academic and professional organizations.

8. Shop for another insurer altogether

Shopping around for car insurance is essential. Various companies use different rates and underwriting factors so that they may evaluate your situation differently. For instance, your job might be considered by one company but not by another.

Getting high quotes from insurers can be frustrating, especially if you expect your premiums to drop once you hit 25. However, because of the abundance of insurers available, you can likely reduce your rate by quite a few dollars by getting multiple quotes from different insurers.

Putting It All Together 

It is common for young drivers, especially teens, to have some of the highest car insurance rates. As drivers reach their 20s, their car insurance premiums begin to drop, a significant drop occurring around 25. Having reached 65 years of age, however, your driving abilities tend to be affected by your age, causing rates to go up. 

Shopping around and being aware of all the discounts available can help you save money on your premiums at any age.