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Auto Insurance

When Will My Car Insurance Rates Go Down?

Curious when your car insurance will go down? While there are no hard-and-fast rules for reduced rates, several factors may contribute to lower premium costs. Keep reading to discover some of the common reasons for lower insurance rates.

When Do My Car Insurance Rates Go Down

The US auto insurance market was worth $327 billion in 2022, a 1.2% increase from the year prior. This is consistent with observed premium increases — for example, the average expenditure for auto insurance in the United States was $1070 per year in 2019, up 1% from 2018.

Despite the steady increase in overall costs, there are cases where your car insurance rates may go down. You can also take steps that may help reduce coverage costs over time. Read on to learn more about when and why your car insurance could go down and what choices you can make to help control insurance costs.

Why Would Your Car Insurance Go Down?

Car insurance operates on the principle of risk. When insurance providers offer policies, the cost of these policies is based on the potential risk you present as a driver. For example, a driver who has just earned their license at 16 years old may be more likely to make a mistake while driving, causing an accident or failing to avoid a potential collision. To account for this increased perceived risk, companies charge higher insurance premiums. 

So when does car insurance go down? As risk lowers, the cost of car insurance may decrease. Common reasons for reduced risk include a history of safe driving, aging out of a riskier age bracket, or dropping another driver from your policy. Here’s a look at each in more detail. 

You’ve Proven to be a Safe Driver

Safe drivers represent a lower risk to insurance companies. As a result, your insurance rates may decrease if you have no record of accidents or traffic infractions on your driving record or if it has been several years since your last accident or traffic incident.

In the case of accidents, both those you cause and those you are involved in may lead to increased insurance costs. Some policies offer the option of accident forgiveness coverage, which comes with an additional cost but protects you against premium increases for your first accident within a set period.

When it comes to traffic infractions, the severity of the infraction may impact your rates. For example, receiving a traffic ticket for failing to stop at a stop sign may lead to a slight increase in your rates the following year. However, if your car is impounded for excessive speed, you may see a more significant policy increase for two to three years. 

However, if you can demonstrate a consistent pattern of safe driving behavior, you may see a steady decrease in your policy costs over time.

You’ve Aged Out of a Riskier Age Bracket

Younger drivers are at greater risk of accidents. Part of this risk stems from a lack of driving experience; younger drivers may panic or make poor choices when confronted with an unfamiliar situation. 

Consider that 16 to 19-year-olds account for 3.5% of licensed drivers in the United States but represent 6.0% of drivers in fatal crashes. On the other hand, drivers ages 35 to 44 represent 16.5% of licensed drivers and 16.5% of drivers in fatal crashes. This means that although there are fewer younger drivers overall, they are over-represented when it comes to fatal accidents.

The total number of drivers in fatal crashes peaks in the 20 to 24 age range, after which it begins to decline. As a result, auto insurance rates also start to fall as drivers age, with higher rates for drivers between the ages of 16 to 19.

On average, these young drivers can expect to pay upwards of $6,000 per year in car insurance premiums. Those in the 20-24 bracket may see rates over $5,000. When drivers are over 30, rates may drop below $3,000. 

Age of the DriverAverage Premium for Coverage
16 years old$6,500
18 years old$6,200
20 years old$5,300
25 years old$3,500
30 years old$3,100
35 years old$2,800

You’ve Gotten Married

Another factor that may influence your insurance rates is your marital status. Put simply, married couples represent less risk than single individuals. 

In this case, driving habits aren’t the issue. Instead, insurance companies view married couples as more financially secure based on stable jobs or their combined credit score, meaning they’re less likely to default on payments or be unable to pay for out-of-pocket expenses such as deductibles. 

You’ve Dropped a Risky Driver From Your Policy

You may also access lower insurance rates if you drop a risky driver from your policy. While it may make sense to have a joint policy with other family members who use the same vehicles, this can negatively impact your insurance rates if another driver on your insurance has a history of accidents or traffic violations.

Parents may add younger drivers onto their insurance policy to reduce the overall amount paid per family. Still, once drivers are financially stable enough to have their own vehicle, it may make sense to have them take out their own policy. Although it may be more expensive for the risky driver, it can help lower total premium costs across a household since the higher rates affect only one driver. 

Keep in mind that many insurance companies will require any licensed household members to be listed as drivers, especially if they don’t have their own insurance somewhere else. But some states will allow you to exclude drivers if they don’t ever use the insured car.

You’ve Bundled Another Policy With Your Car Insurance

Many insurance providers offer more than 1 type of insurance. For example, your provider might offer home, car, life, and recreational vehicle (RV) insurance. To encourage buyers to opt for a single company rather than spreading out policies across multiple insurers, providers may offer discounts if you bundle 2, 3, 4, or more policies together. 

You’ve Changed Insurance Companies

You may also access lower rates if you change insurance companies. In some cases, lower rates may be part of an incentive strategy for new customers or reflect a different approach to calculating risk. 

As a result, it’s worth regularly shopping around for other insurance quotes and contacting your current provider to see if they can offer any discounts based on the quote data you find. In many cases, it’s possible to get a new quote using online tools — enter basic details about your car, driving history, and age to get a basic quote. Then, if the number looks promising, get in touch with the provider for a customized quote. 

Other Ways to Decrease Your Car Insurance Premium

You can also take the following steps to help decrease your car insurance premium:

Adjust Your Coverage

One way to decrease your car insurance premiums is to adjust your coverage limits. For example, if you currently have comprehensive and collision coverage on your 15-year-old car, it might be worth reducing your coverage limits or picking be worth between one of the other.

Adjust Your Deductible

Another option for reducing your rates is to adjust your deductible. This is the amount you pay out-of-pocket before your insurance coverage applies. Increasing this deductible means you pay more out-of-pocket in the event of an accident, but it also means that your insurance company accepts less risk, bringing down the cost of your premiums.

Change Your Car Insurance Type to Suit Your Driving Habits

Changing your car insurance type to better suit your driving habits is also possible. For example, consider an older driver who uses their car twice weekly for trips to the grocery store but rarely drives elsewhere. Given the limited time they spend on the road, their risk is lower than someone the same age, with the same vehicle, and the same driving history who drives to and from work every day.

Traditional insurance policies assign the same premiums to both drivers based on these factors. However, newer options, such as usage-based insurance, use mobile apps or connected in-car devices to track user behavior and offer customized insurance rates.