At what age does car insurance get cheaper?
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UPDATED: Mar 13, 2020
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Car insurance for young drivers can be expensive and you certainly do not want to pay the same cost of auto insurance for a 17 year old your whole life. The good news is that car insurance rates do come down at certain age milestones.
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When a driver reaches the age of 25 car insurance rates usually reset to typical auto insurance premiums paid by most good drivers. However this is not set in stone and will depend on a number of variables. If you have held a driver’s license for a number of years with a clean driving record you will most likely see cheaper car insurance quotes at the age of 25 but sometimes even turning 25 does not necessarily mean lower premiums.
Will my car insurance rates automatically drop when I turn 25?
For most drivers the answer is yes but auto insurance rates are based on a number of factors. While turning 25 is often a cause for celebration when it comes to car insurance rates it can also be frustrating for some drivers who opted to get their driver’s license later in life or never held a prior auto insurance policy in their name. Some factors which may restrict you from getting automatic lower car issuance rates on your 25th birthday include:
How long have you had your license?
Car insurance companies need a threshold to define a young driver from a mature driver and 25 is the age where drivers are assumed to be more responsible in life – Past the college years, with a real job (hopefully) and possibly even settled down. However for those people who decided to bike it to school and work up until now you may very well be classified high risk simply because you lack experience behind the wheel. Part of the assumption that age 25 is a lower risk level to car insurance companies is the driver has a few years driving record behind him/her. Without this good driving record and experience you will not see much difference in car insurance premiums simply by changing the age on your Facebook profile. Waiting to get your divers license until you are 25 is not a good idea when it comes to car insurance so even if you don’t expect to drive try to always secure your license earlier in life.
What type of car insurance did you have before?
Were you a secondary driver on your parent’s car insurance policy? Did you have a low mileage policy? Typically when people refer to a lower cost of car insurance at the age of 25 they are comparing apples to apples. This means drivers who have a policy in their name as a primary driver will see a big drop in rates when they turn 25 but if you have already been paying lower rates as a non-primary driver you may not see a lot of difference switching to a policy in you name.
Are you trying to insure a more expensive car?
Teenagers and young drivers often buy any vehicle for transportation in their school years but once a real paycheck arrives then its time to consider a new car. This new car might actually be much more expensive to insure than your prior vehicle so while you will get discounted rates at age 25 this doesn’t always correlate to a cheaper cost of car insurance. Remember, the comparison between young drivers insurance and the cost for drivers over 25 are all based on the assumption all things are equal. When you upgrade to a new vehicle there is an extra premium to be paid regardless of your age.
Are you buying more coverage?
With a new car often comes more insurance coverage including comprehensive, collision and even GAP insurance. Its very possible your old junker only had liability insurance so anytime you purchase more coverage you will see an increase in rates. However drivers over 25 simply pay less for more coverage than young drivers. While your monthly premium may not change you will be able to afford coverage on the same budget. Exciting eh? Wait until you buy a house and have to pay property taxes, maintenance fees, homeowners association due and more.
Who has the cheapest car insurance for drivers aged 25?
This is one of the turning points in life when you have to step up and learn about financial responsibility. Almost every purchase you make in life should incorporate understanding the details of the product and comparing multiple quotes. Buying car insurance is a very good test of your skills as the market is not only extremely competitive but a wealth of information is available online. From the available car insurance discounts to the types of car insurance its important to focus on understanding how car insurance works and comparing quotes from at least a handful of providers. There are many great car insurance companies around but you only need one so shop around and find the best coverage at the most affordable prices. Make your parents proud!
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