At What Age Does Car Insurance Start to Go Down?

The cost of car insurance decreases each year for drivers between 16 and 24. If you’re wondering if car insurance rates go down when you reach 25, MoneyGeek’s data shows otherwise. Based on our information, your premiums decrease the most on your 19th and 21st birthdays.

Regarding the cost of car insurance premiums, several factors affect it besides age. Gender may cause rates to vary — quotes for younger male drivers tend to be higher than for females. If you’re concerned about cost, there are also many ways to find more affordable car insurance rates.

• Does Car Insurance Go Down at Age 25?
• Other Factors that Make Your Car Insurance Premiums Go Down
• How Drivers Under 25 Can Pay Less for Car Insurance
• Frequently Asked Questions

Contrary to popular belief, the average annual cost of car insurance does not begin to go down at age 25.

It isn’t surprising, though, that most people think 25 is when insurance rates go down. A 2018 survey by the AAA Foundation for Traffic Safety found that at least 60% of American drivers get their license before age 18, which means they would have several years of driving experience by the time they turn 25. Car insurance companies also view drivers between 16 and 24 to be riskier to insure. When you turn 25, you’re officially past that high-risk group and get to enjoy more affordable rates.

Our graph indicates that typical auto insurance premiums decrease significantly even before your 25th birthday. Once you hit that age, you’ll notice annual premium prices hardly vary until you’re in your 50s.

You can also see that car insurance rates are more expensive for drivers with less experience. Although most people believe that 25 is the age when car insurance rates go down, the most significant decreases occur when drivers turn 19 and 21. Rates continue to lower until you turn 30. After that, they tend to remain roughly the same. The only time premiums begin to increase again will be when you become a senior driver.

Car insurance rates are typically higher for young drivers, so it pays to shop around to find the cheapest car insurance companies.

The decrease in rates for car insurance between males and females are different because of factors like the likelihood to cause accidents, chances of having DUIs and even taste in vehicles.

According to the National Highway Traffic Safety Administration, male drivers are more likely to be involved in fatal accidents due to speeding and drive cars that cost more to insure. An FBI report also found male drivers are twice as likely to be arrested for severe driving violations like DUIs.

The difference in car insurance rates between men and women is more pronounced before 25. For instance, MoneyGeek found that 16-year-old male drivers pay $422 more than females on average.

The table above shows the premiums for men and women getting closer as they age. It continues until 25 when they pay roughly the same rate for coverage. After 30, female drivers pay slightly more for car insurance. Based on MoneyGeek’s analysis, no data indicate a confirmed risk factor in older women drivers.

Sixteen-year-old drivers pay around $4,000 more for car insurance than 25-year-olds. The significant gap is primarily due to a younger driver’s lack of experience behind the wheel. The years leading to your 25th birthday are when you mature and develop the most as a driver. It eventually leads to the point when insurance rates go down.

It isn’t a young driver’s actual age that makes him riskier on the road. It’s the behaviors typically connected with this particular age group. For instance, 40% of accidents involving this age group occur during Friday, Saturday and Sunday nights when teens are likely to have social plans. They are also less likely to use seatbelts, which is unfortunate because they are more likely to miss road hazards while driving. These are behaviors you typically outgrow as you gain more experience behind the wheel.

In addition to age, other factors significantly contribute to the cost of car insurance for young drivers.

If you're wondering when car insurance rates go down, you need to understand that age isn’t the only contributing factor. Other aspects are just as vital, if not more so, to providers.

A prime example is driving experience. If two 26-year-old drivers purchase car insurance, with one only having started driving a month ago while the other has been behind the wheel since they were 16, you’ll see a significant difference in their premiums. The former is less experienced, and carriers will consider them riskier to insure, resulting in higher car insurance rates.

There are several factors aside from age contributing to the cost of car insurance. Because providers consider so many variables, it’s always best to compare rates from multiple carriers.

There can be confusion about when car insurance costs typically decrease. Unless you study the data, you might also think that car insurance rates go down when you’re 25. Learning the answers to some common questions can clear up any remaining confusion.