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What age does car insurance go down?

Fact-checked with HomeInsurance.com

    Article Highlights

    High schoolers and college students typically pay significantly higher rates, on average, for car insurance. Whether you are a teen on a parent’s policy, or a young driver on your own policy, you may be wondering, when will my insurance rates start to go down? From age 16 to 30, rates will generally decrease, provided you don’t add any accidents, speeding tickets or DUIs to your record. Let’s look at some of the factors that go into determining your auto insurance premiums and what you can do to keep them as low as possible. 

    How auto insurance rates are set

    There are several key factors that are used by the insurance company to determine how much you will pay for car insurance. These factors include:

    • Your age
    • The state you live in
    • Your driving record
    • Your credit score
    • The kind of car you have
    • Your marital status

    In general, drivers under the age of 25 pay much higher premiums than those who have reached this age. Your rates will generally stay about the same from your 30s and 40s through age 65, then will usually start to rise again. Here is a breakdown of the average cost of car insurance by age:

    New and teen drivers

    Both younger and older drivers are statistically much more likely to have an accident than middle-aged drivers, but the accident rate for teenagers is much higher than that for older drivers. This is primarily why car insurance is so expensive for teenagers, and why having a teen added to a parent’s policy can help mitigate the cost. Teenagers are also the least experienced drivers on the road and are not as likely to have encountered other drivers, inclement weather severe enough to impair their driving ability, or other factors that can contribute to an accident. On their own policy, rates are typically the highest for 17- and 18-year-old drivers.

    Drivers between 20 – 24

    During this period, most drivers will see peak costs gradually start to decline as they near age 25. While rates are likely lower than those seen in the teen years, the cost is still significant, particularly at a time when drivers may also be dealing with independent living expenses or college tuition. Leveraging safe driving or good student discounts and comparing provider rates is essential to finding affordable insurance for drivers in this age range. 

    Drivers between 25 – 55

    Drivers in this category are in the “sweet spot” for insurers because they have accrued driving experience and typically settle in the lower risk category of life circumstances. Car insurance

    rates for those in this age range are generally lower than they are for any other age range. Moving into the senior years, drivers may see rates increase a bit, but generally not to the same extent of teen drivers.

    When your auto insurance rates decrease

    Although rates tend to decrease gradually from early 20s on, once you reach age 30, your car insurance rates will most likely be at its lowest. Decreased accident risk, a more settled lifestyle and overall driving experience contribute to the reduced rates. By this age you may also have a home and can take advantage of a bundled policy discount.

    With so many variables contributing to the cost of insurance, age is one that will generally always cause your rate to decrease over time, at least until you reach retirement age.

    How to reduce the impact of age on your car insurance rates

    If you are still a teenager or under the age of 25, there are several things that you can do to reduce the cost of car insurance. Here are a few that can have a significant impact on the cost of car insurance for young drivers:

    • Good student discount – Many insurers will offer a discount to students who maintain a certain grade point average, such as B or B+.
    • Safe driving program – This program can help young drivers to spot potential causes of accidents before they happen and to be more alert to possible dangers when they drive. Completing the program often results in a nice discount that varies by provider offering the program.
    • Monitoring app or device – Helps determine rates based on driving behaviors and associated risk.
    • Multi-car discount – If you or your family insures multiple cars under one provider, you may see additional savings.
    • Autopay discount – This is especially helpful if the driver can pay for insurance for 6 months at a time.
    • Safety equipment discount – Rewards drivers whose vehicles include features designed to reduce possible damages and injuries in an accident.
    • Away from home discount – Particularly applicable to college-aged drivers.

    Other ways to save on car insurance

    There are also several other things you can do to save money on your car insurance premiums that do not depend on your age. Some of these actions include:

    • Reducing or dropping your collision coverage and carrying only liability insurance if you have an older car.
    • Taking a defensive driving course. Similar to the safe driving program listed above, this type of course is relatively inexpensive and can sometimes net you a discount on your insurance, depending on the provider. 
    • Electing for an economy vehicle.
    • Raising the deductibles on your collision and/or comprehensive insurance coverage. If you can establish an emergency fund of cash that has at least enough money in it to meet your increased deductible in the event of a claim, you will likely see a lower monthly premium. 
    • Avoid any speeding tickets on your record. Tickets will generally make your insurance go up, so if you have one and can take defensive driving to have it removed from your driving record, you can potentially avoid a costly insurance spike.

    The takeaway

    • Auto insurance companies typically charge more based on driver experience or risk, which affects younger or teen drivers the most.
    • Rates usually start to decline for those in their early 20s and decline significantly when they reach age 25.
    • There are a number of different measures that you can take to reduce your car insurance expenses when you are younger.
    • Other things can be done to reduce your auto insurance regardless of your age.

    Car insurance is usually the most expensive when you’re young, but thankfully, time and experience generally reduces rates. Taking some or all of the measures that are listed here can help you to lower your premiums in the meantime. Consult your financial advisor or insurance agent for more information on car insurance and what you can do to lower your rates.

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