At What Age Does Car Insurance Go Down? Understanding Rate Changes
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Not surprisingly, younger drivers are often considered riskier drivers. Drivers ages 15 to 20 are involved in more fatal crashes than any other age group, and more than 203,000 young drivers were injured in a motor vehicle crash in 2021. That’s why car insurance is usually more expensive for this demographic. Simply put, a car accident affects rates of insurance premiums.
At What Age Do Auto Insurance Premiums Tend To Drop?
The good news is that auto premiums tend to drop at age 21 and again at 25. Of course, insurance premiums can be impacted by factors other than age, such as driving record, credit scores, defensive driving classes, and history of claims. The answer to “At what age does car insurance go down?” will vary from person to person and state to state.
The Impact of Gender on Rates
Gender impact on rates is a real thing: Men typically pay more than women do for car insurance based on safer driving reports. In fact, men are involved in nearly three-quarters of fatal car accidents. The difference in insurance premiums, however, is generally minor. Marital status can also play a role in decreasing insurance costs, and it may also allow for the bundling of other insurance products, which can lead to further cost savings.
Key Milestones for Insurance Rate Reduction
The voting age, the legal drinking age, and the age at which you can finally rent a car are often key milestones for an insurance rate reduction.
Turning 18 and Legal Responsibility
Teen drivers are considered the riskiest drivers to insure, which is why they usually pay higher auto insurance premiums. However, drivers who have clean driving records and no-fault accidents on their record may get a break at age 18. These breaks can vary based on the insurance company and location.
Age 21: First Significant Rate Drop
Auto insurance premium rates for younger drivers often see a large drop when the driver reaches age 21. Drivers will see annual rates continue to fall until they reach their 30th birthday, and then they will typically plateau for the next few decades since middle-aged drivers are considered the safest bets on the road.
Age 25: Major Decrease in Premiums
Age 25 can be a magical number for some drivers, depending on their insurance company and driving record. Many drivers will enjoy a major decrease in car insurance premiums at this age.
Other Factors That Affect Car Insurance Costs
Age is a big factor in insurance premiums, but it is not the only one.
- Driving record and history: If you have a history of accidents and incidents, your insurance premium will definitely reflect this. A clean driving record, on the other hand, will support notable drops in premium costs.
- Geographic location: Urban areas have higher insurance rates than rural ones, thanks to higher rates of theft, vandalism, and accidents. Likewise, if you park in a garage, your rate will be lower than that of someone who parks on a busy street. Areas impacted by severe weather events can also see increases in insurance costs.
- Credit scores and financial responsibility: Insurers often look at your credit score as a sign of your financial responsibility. They use this as a tool to determine how likely you might be to make regular payments and file a claim. Credit scores impact what you pay for other forms of insurance as well.
- Life events: When you get married, your insurance premium will likely decrease based on the notion that you are typically older and a more experienced driver. In addition, a joint policy is often more affordable than two separate ones. Having children can lead to another decline in premium costs since insurance companies believe you will be a safer driver with kids in the back seat.
- Maintaining a clean driving history: A clean driving record is always a big plus in the eyes of your insurance company. Stay safe on the road, keep your insurance up to date, and take a defensive driving class, and you will reap the benefits of less expensive insurance.
Tips for Young Drivers To Reduce Costs
For those anxious to hear at what age car insurance goes down, the answer is typically 21, but it varies. Nevertheless, young drivers can take action to reduce insurance costs.
For starters, look for bundling discounts. Parents with teens at home can also add them to their policies, which will be less expensive than a single policy for a new driver. If possible, pay the policy in full annually or bi-annually, which often comes with a discount.
Finally, make sure you take a defensive driving class. Not only will this help your confidence on the road, but it can also reduce your insurance costs.
Comparison Shopping for the Best Rates
Searching for the best rates is another great way for young drivers to save on auto insurance. EverQuote gives you the ability to comparison shop for insurance, bundle auto insurance with other policies, and find the best deal for young drivers. Online comparison shopping makes it easy to view your options side by side and find the most affordable insurance for younger drivers.