Younger drivers, especially teens, have some of the most expensive car insurance rates. Drivers see their car insurance premiums start to go down around age 20, with a big drop coming around age 25. Rates tend to level out for decades beginning around age 35. Once you're past 65 years old, however, age tends to affect driving capability. That can lead to higher auto insurance risk, in turn leading to increases in annual premiums again. This article will cover:
- Average auto insurance cost by age
- How auto insurance premiums change over time
- How to save money on car insurance as you get older
When do car insurance premiums go down?
From ages 16 to 25, your car insurance rates will steadily go down for every year that you keep your driving record clean. Car insurance rates go down at age 25 by a large margin. Rates then decrease slowly but surely until age 65, before increase again. Keep in mind that these average rates can be affected by other factors such as your driving and insurance claim histories.
How age affects your auto insurance rates
Age: 16 to 20 years old
Average monthly rate: $396
Young drivers face the highest insurance rates of any age group.
Age: 25 years old
Average monthly rate: $194
When a driver turns 25 years old, their rates drop considerably.
Age: 30 to 65 years old
Average monthly rate: $154
After the big drop at age 25, rates remain steady for decades.
We found that a 20-year-old driver pays $321 per month for car insurance. At age 25, car insurnace rates go down by about 40% to just $194 per month. Between ages 35 and 65, rates fluctuate slightly but overall stay flat. Once a driver hits 70 years old, their auto insurance rates may start going up again.
As long as you keep your driving and insurance claim histories clean, you should expect to have very few changes in your auto insurance premiums for decades after turning 30. If you do find that your car insurance provider is hiking up your rates despite your excellent driving record, it's a good time to compare quotes from other auto insurance companies.
Your age impacts your car insurance rates.
How do your rates compare to other drivers your age?
Why young drivers pay so much for insurance
Young drivers under 25 years old are usually seen as high-risk by auto insurance providers.
The primary reason for this is their lack of experience behind the wheel. This leads to a greater chance of a car accident. The cost of teen driver insurance is especially expensive. According to the National Household Travel Survey, the crash rate per mile was 1.5 times higher for 16-year-old drivers than it was for 18- to 19-year-old drivers. Across the spectrum of high-school-age drivers, 32.8% of them have texted or emailed while driving.
Why insurance rates increase for seniors
Once a driver hits 65 years old, they usually see higher rates than other age groups. Over the years, eyesight, reflexes and cognitive ability can decline. Car insurers notice this. As such, senior drivers can expect an increase in rates as they get older. According to AAA, the chance of a fatal crash increases at age 75 and spikes considerably at age 80. At this time, you can expect a sharp increase in your auto insurance rates.
How do I lower my auto insurance rates?
Depending on how old a driver is, there are various options for possibly lowering your auto insurance rates. Auto insurance companies offer many types of discounts that can shave a considerable amount of money off of your annual premium:
- If you're under 25 years old, you'll want to take advantage of all the discounts you can find to get that high premium down. A common discount available to young drivers is the good student discount. If you maintain a GPA of 3.0 or more, you can see a discount on your annual auto insurance premium anywhere from 7% to 25%.
- If you're a parent of a teen driver, many providers allow you to add a child to your auto insurance. On the downside, adding a child to your own auto insurance policy will cost you an average of $278 a month extra. However, this is still less than you would pay for a standalone car insurance policy for a younger driver.
- If you're married, ask your car insurance provider about a discount. Auto insurers usually find married couples to be safer drivers and reward that lower risk with a discount. Also, having multiple drivers or multiple cars on your policy may reduce overall costs.
- To offset costs for senior drivers, many auto insurance companies offer a senior discount. Also, AARP offers safe driving classes. If you take the class and pass, car insurance providers may offer you a safe driving discount.
- If you're driving less and can afford it, look into increasing your deductible. The higher your deductible, the lower your auto insurance premium usually is. This would mean paying more in deductibles if you do have an accident. However, reduced driving on your part means less of a chance of having an accident, and therefore paying a deductible.
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