For many folks, insurance is seen as a complex matter, especially when it comes to car insurance for young adults since they tend to pay the highest premiums of all drivers. Therefore, one of the most critical questions young people have on their minds regarding car insurance is, “Does car insurance go down at 25?”
Well, the short answer to this question is yes. However, the difference might not be as significant as you think. So, how much does car insurance go down after turning 25?
Every year of driving experience translates to lower car insurance rates. The idea behind this strategy by insurance providers is that once drivers turn 25, they have enough experience behind the wheel to make them less of a liability; hence they are entitled to pay comparatively lower premiums.
Does Car Insurance Go Down at 25?
For those wondering, let's explain the difference between the insurance rates for 24-year-olds and 25-year-olds. If you are a 24-year-old, car insurance will cost you on average 11% more than when you reach 25.
You should also know that if you simply avoid any unfortunate incidents while on the road and get zero traffic violations until you are 25, you will be in a much better position when it comes to the car insurance rates when you do turn 25. If you have a previous driving track record that’s squeaky clean, once you turn 25, you can contact your insurance provider and get your insurance premium updated.
When Does Car Insurance Go Down?
Are you still wondering, “Does car insurance go down at 25”? Then, it is good to know why and how age affects auto insurance rates as you get older. Educating oneself on the finer points of car insurance and the difference that age makes in the amount one has to pay will ensure that you will take full advantage of the cost cuts in auto insurance when the time is right.
One of the key reasons why you should pay attention to the fine print when it comes to buying car insurance is that young adults have to pay notoriously high rates because of the strict regulations of insurance providers. This is mainly because younger drivers are statistically more prone to getting into an accident while on the road. Due to a high number of claims, they cost the insurance companies more money in property damage and medical bills.
However, with time, young drivers tend to gain more experience behind the wheel, which results in the insurance premium slowly decreasing. As soon as a driver reaches 25, the insurance costs drop significantly. Moreover, age is no longer considered a factor that can impact car insurance rates. That is until one turns 65 years of age and the premiums begin to climb once again, mainly because older folks are also seen as a higher risk.
How Much Does Your Car Insurance Go Down When You Turn 25?
While it is true that younger drivers have to pay more for car insurance, that is not the only factor that affects the costs. It is hard to predict how much your car insurance will decrease as you approach the age of 25. In fact, some young drivers who have already turned 25 will not see any changes at all in terms of their insurance premiums, despite the benefits that turning 25 years of age brings. It is because they might fall into the following categories:
- Inexperienced Drivers — No matter how old you are, your driving experience comes first. For instance, older drivers who are just learning how to drive a car will have to pay higher rates simply because they are inexperienced. 25-year-old drivers who just got their driver’s license a year ago are also going to be considered inexperienced by the insurance provider. They will pay higher premiums than a 25-year-old who got a permit at 15 and has been driving for a decade. In both situations, the insurer is not going to take into account the age of the applicants but rather the years of driving experience they have.
- Drivers that have a bad record (violations, accidents, etc.) — If you got a license at 17 and had a spotless driving history ever since, you’ll be considered for a decrease in your mid-twenties. However, if you have a driving record that’s less than stellar, thanks to frequent accidents and traffic violations, then you cannot expect your premiums to drop just because you’ve turned 25.
What Age Does Car Insurance Go Down For Males vs. Females?
On average, car insurance for 25-year-old males costs 2.5% more than for their female counterparts of the same age. This is great news for all female drivers out there looking for a cut in their car insurance premiums. However, the gap is not that wide when it comes to what male and female drivers have to pay before they turn 25. For instance, compared to the difference that 18-year-old males and 18-year-old females pay (11%), or even the difference between what 23-year-old males and 23-year-old females pay (6.7%), 2,5% is a much smaller gap.
When does car insurance go down for males?
Auto insurance rates start to go down significantly for men by age 21, decreasing an average of 30% ($1,236 to $955 per year) from ages 20 to 21. Afterward, car insurance premiums for men decrease steadily by $50 to $100 per year until they hit the lowest amount around age 64.
What age does car insurance go down for females?
Auto insurance rates for women drop significantly at age 21, going down about 27% from $1,114 to $878 — that’s less than men of the same age pay for car insurance. Moreover, women typically pay less than men for car insurance from age 16 to 26 because they’re more careful in driving and less prone to get in accidents.
Note that in certain states across the US, it is considered illegal for car insurance providers to consider the gender of the driver while calculating the amount of car insurance premiums. Some of the states that have this law enforced include the following:
- Pennsylvania
- North Carolina
- Montana
- Michigan (in certain areas)
- Massachusetts
- Hawaii
- California
Discounts for 25-Year-Old Drivers
Who doesn’t like discounts, especially when they can save you from having to pay high premiums on your car insurance? While it is true that once you turn 25 years old, you may not be eligible to take advantage of good student-specific policies, there are plenty of other ways to save money on car insurance. Here’s a list of the discounts that are available for 25-year-olds:
- A Telematics Program — A telematics program has been designed to reward drivers who drive safely.
- Car Safety Features — Does your car have certain safety features, such as anti-lock brakes or daytime running lights? You could receive an auto insurance discount because of that.
- Professional and Academic Organizations — You may also be eligible for a discounted insurance rate if you are part of a professional or academic organization.
- Policy Paid in Full — Those customers who pay in full can also receive a significant discount.
- Low Usage and Mileage — If you don’t drive much — fewer than 7,500 miles a year — you may be able to score significant savings on your auto insurance premiums.
- E-Bills and Auto Payments — Using e-billing or electronic fund transfer services can also give you a nice discount.
- Defensive Driving — Those who have taken additional driving lessons such as defensive driving lessons and have passed the test may also be eligible for a discounted insurance rate.
- Accident-Free Discount — Insurance providers are always concerned about the individual’s driving experience. This is where having an accident-free and traffic violation-free driving history helps.
Does Car Insurance Go Down Every Year?
If you are a young driver, then one of the questions that you may have is, “Does car insurance go down every year?” and if the answer is yes, then, “How much does car insurance go down every year?”
The rates of car insurance are going to drop by $50–$100 every year until they reach the lowest amount around age 64. However, that is assuming that you have a clean driving record, as in, you haven’t been in any car accidents or had traffic violations. The insurance provider will determine the car insurance premium based on your driving record, credit history, and other factors.
Furthermore, it is important to know why insurance providers offer higher premiums to younger drivers in the US. According to the report by the Centers for Disease Control and Prevention (CDC), an estimated 2,000 teens between 16 and 19 years old were killed in vehicle-related accidents in 2014 alone, while 221,000 were injured. Young drivers often lack experience, drive too fast, and take part in other activities while driving, which results in a higher rate of accidents amongst those age groups. That’s why car insurance companies keep your rates on the higher side until you at least reach your mid-20s.
Other Factors That May Affect Your Premiums
Now, let’s move on to some other factors that are considered by insurance providers when it comes to setting the rates of car insurance premiums:
- Your vehicle’s make and model
- Your marital status
- Your gender
- Your driving record
- Your credit history
- Your place of living
- How frequently you drive
Each of them may increase or decrease the premiums that a driver has to pay regardless of age.
Why Isn’t My Car Insurance Going Down at 25 Years Old?
In case you are one of those young drivers wondering why your car insurance premiums have not gone down despite you turning 25 years old, you are not alone. The following are some of the factors listed by the car insurance providers that may impact the amount of premium that has to be paid for car insurance:
- Credit History — This is another major factor considered by the insurance providers. For those living in California, Massachusetts, or Hawaii, a lower credit score may increase your car insurance rates.
- Driving History — If you’ve received a speeding ticket or have been in an accident, you’ll be categorized as a high-risk driver and will have to pay accordingly.
- Experience — If you’ve just started driving at 25 years old (or above) and it is also your first time buying car insurance, you’re going to end up paying more than a driver who got the license at 16.
- ZIP Code — Your zip code is also going to make a difference in the amount of car insurance premiums you have to pay. For instance, the insurance will cost more for those who live in a neighborhood with high theft and vandalism rates due to the increased risk of damage or theft.
In Conclusion
So, if you were wondering, “Does car insurance go down at 25?” then you must be pleased to know after reading this article that your rates are likely to decrease once you turn 25 years old. However, that will work provided you have a clean driving record with no traffic violations or vehicle accidents.
