At What Age Does Car Insurance Start to Go Down?

Many people think car insurance rates automatically decrease when you turn 25. You may be surprised to know that your 25th birthday may get you less impressive discounts from providers than you might expect. With this in mind, at what age do car insurance rates truly begin to go down?

Last Updated: 6/17/2022
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The cost of car insurance decreases each year for drivers between 16 and 24. If you’re wondering if car insurance rates go down when you reach 25, MoneyGeek’s data shows otherwise. Based on our information, your premiums decrease the most on your 19th and 21st birthdays.

Regarding the cost of car insurance premiums, several factors affect it besides age. Gender may cause rates to vary — quotes for younger male drivers tend to be higher than for females. If you’re concerned about cost, there are also many ways to find more affordable car insurance rates.

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Key Takeaways

male

Our data shows car insurance premiums decrease the most at ages 19 and 21. It contradicts the common belief that rates drop once you turn 25.

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Your car insurance premium is less likely to be affected by age when you reach 25, which is why rates stabilize at this point.

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There are several factors besides age affecting the cost of car insurance. Your driving experience, coverage lapses and driving history affect premiums more significantly than your 25th birthday.

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Does Car Insurance Go Down at Age 25?

Contrary to popular belief, the average annual cost of car insurance does not begin to go down at age 25. Car insurance rates for 25-year-olds are also not significantly affected by discount programs because insurance companies don't offer many discounts just for turning 25.

Although rates for younger drivers see a steady decrease each year, our data shows two instances when car insurance rates drop the most. One is when drivers turn 19, while the other is for 21-year-old drivers.

Price Reductions at Different Companies for Turning 25

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  • Company
    Percent Decrease
  • Progressive
    13%
  • Nationwide
    11%
  • State Farm
    10%
  • GEICO
    7%
  • Allstate
    6%

The average annual decrease of premium prices between 16 and 25 is 13%. Using this as our benchmark, the difference in insurance costs each year may look unimpressive. Some companies, such as Nationwide and Progressive, offer more attractive discounts when you turn 25, but this is not the norm. Car insurance rates are typically higher for young drivers, so shopping around is a good idea since providers offer varying rates.

It isn’t surprising, though, that most people think 25 is when insurance rates go down. A 2018 study showed at least 60% of American drivers get their license at 18, which means they would have several years of driving experience by the time they turn 25. Car insurance companies also view drivers between 16 and 24 to be riskier to insure. When you turn 25, you’re officially past that high-risk group.

Our graph indicates that typical auto insurance premiums decrease significantly before your 25th birthday. Once you hit that age, you’ll notice annual premium prices hardly vary until you’re in your 50s.

Based on MoneyGeek’s chart, you can see that car insurance rates are more expensive for drivers with less experience. Although most people believe that 25 is the age when car insurance rates go down, the most significant decreases occur when drivers turn 19 and 21. Rates continue to lower until you turn 30 — after that, they tend to remain roughly the same. The only time premiums begin to increase again will be when you become a senior driver.

Do Male or Female Premiums Go Down Differently by Age?

The decrease in rates for car insurance between males and females are different because of factors like the likelihood to cause accidents, chances of having DUIs and even taste in vehicles.

According to the National Highway Traffic Safety Administration, male drivers are more likely to be involved in fatal accidents due to speeding and drive cars that cost more to insure. An FBI report also found male drivers are twice as likely to be arrested for severe driving violations like DUIs.

The difference in car insurance rates between men and women is more pronounced before 25. For instance, MoneyGeek found that 16-year-old male drivers pay $422 more than females on average.

Comparison Table of Male & Female Premiums at Younger Ages

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  • Age
    Female
    Male
    Extra Amount Paid by Males
  • 16
    $3,160
    $3,583
    $422
  • 17
    $2,940
    $3,338
    $398
  • 18
    $2,686
    $3,048
    $362
  • 19
    $2,629
    $2,949
    $320
  • 20
    $2,333
    $2,597
    $264
  • 21
    $1,873
    $2,042
    $169
  • 22
    $1,759
    $1,876
    $117
  • 23
    $1,601
    $1,696
    $95
  • 24
    $1,508
    $1,578
    $70
  • 25
    $1,393
    $1,411
    $18

The chart above shows the premiums for men and women getting closer as they age. It continues until 25 when they pay roughly the same rate for coverage. After 30, female drivers pay slightly more for car insurance. Based on MoneyGeek’s analysis, no data indicate a confirmed risk factor in older women drivers.

Comparison Table of Male & Female Premiums at Older Ages

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  • Age
    Female
    Male
    Extra Amount Paid by Males
  • 30
    $1,285
    $1,250
    -$35
  • 50
    $1,187
    $1,171
    -$16
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DID YOU KNOW?

Some states, including California, Hawaii, and Massachusetts, have already begun equalizing car insurance rates by prohibiting gender from being used as a car insurance rate factor.

Why Car Insurance Drops So Much for Drivers Under 25

16-year-old drivers pay around $4,000 more for car insurance than 25-year-olds. The significant gap is primarily due to a younger driver’s lack of experience behind the wheel. The years leading to your 25th birthday are when you mature and develop the most as a driver. It eventually leads to the point when insurance rates go down.

It isn’t a young driver’s actual age that makes him riskier on the road. It’s the behaviors typically connected with this particular age group. For instance, 40% of accidents involving this age group occur during Friday, Saturday and Sunday nights when teens are likely to have social plans. They are also less likely to use seatbelts, which is unfortunate because they are more likely to miss road hazards while driving. These are behaviors you typically outgrow as you gain more experience behind the wheel.

In addition to age, other factors significantly contribute to the cost of car insurance for young drivers.

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MONEYGEEK EXPERT TIP

25 is generally the age that car insurance rates decrease for most people — but it’s no magic number. Other factors can play a much bigger role in determining the cost of your premium.

Other Factors that Make Your Car Insurance Premiums Go Down

If you're wondering when car insurance rates go down, you need to understand that age isn’t the only contributing factor. Other aspects are just as vital, if not more so, to providers.

A prime example is driving experience. If two 26-year-old drivers purchase car insurance, with one only having started driving a month ago while the other has been behind the wheel since they were 16, you’ll see a significant difference in their premiums. The former is less experienced, and carriers will consider them riskier to insure, resulting in higher car insurance rates.

  • Factor
    Why It Matters
  • Driving Record
    Having violations on your record — whether a ticket or a DUI — makes you a high-risk driver and leads to more expensive annual car insurance premiums.
  • Marital Status
    Insurance providers see married drivers as more financially stable and more likely to drive safely than those who are not, regardless of whether they are single, married or widowed. Married people are also more likely to put both their cars under a single policy, making them eligible for multi-car discounts.
  • Education Level
    Having a bachelor’s degree, a master’s degree or a Ph.D. results in lower car insurance rates. Studies have shown that drivers with higher educational attainment are less likely to file claims than those without advanced degrees.
  • Job
    Car insurance providers often consider your chosen career when setting premiums but may use different logic when calculating rates. If you are an executive, one carrier might charge a higher rate since you spend more time on the road, increasing the chances of an accident. Others may offer a lower premium since they view you as more responsible and financially stable.
  • Credit History
    Studies have shown that drivers with poor credit are more likely to file claims, leading to more expensive car insurance rates.
  • Location
    Where you live contributes to the cost of your premium. Drivers from more populated areas with higher crime rates tend to spend more on car insurance.

There are several factors aside from age contributing to the cost of car insurance. Because providers consider so many variables, it’s always best to compare rates from multiple carriers.

How Drivers Under 25 Can Pay Less for Car Insurance

Car insurance for a 25-year-old can be expensive. Taking these actions can help young drivers lower their insurance costs and receive more affordable premiums.

1

Improve your driving record.

Safe drivers pay significantly lower premiums than those with violations. If you currently have a clean record, keep it that way because it will benefit you tremendously in the long term.

2

Shop around for quotes.

Rates don’t just vary between areas or driver profiles — they also differ between providers. Although you can get a loyalty discount for staying with the same company each year, taking the time to compare car insurance quotes may help you find lower rates. It’s particularly beneficial when you’re young, and policies are typically more expensive.

3

Boost your credit score.

Car insurance providers offer lower rates to drivers with good credit because it reflects how well you manage your finances. Improving your credit may take time, but it also comes with long-term advantages.

4

Seek out all available discounts.

Different insurance providers offer varying discounts, so it’s best to check what options you have available. Pay particular attention to discounts that fit your situation, such as new car discounts or those for good students.

5

Take a defensive driving course.

You can often get a discount if you complete a defensive driving course. However, not all carriers offer this, so inquire about it with your provider beforehand.

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LEARN MORE ABOUT SAVING ON CAR INSURANCE

Although car insurance rates are higher when you’re younger, there are practical ways to lower them. These five tips are the most common approaches, but you can get more information from MoneyGeek’s article on reducing car insurance costs.

Frequently Asked Questions

There can be confusion about when car insurance costs typically decrease. Unless you study the data, you might also think that car insurance rates go down when you’re 25. Learning the answers to some common questions can clear up any remaining confusion.

About the Author


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Mark Fitzpatrick is a senior content manager with MoneyGeek specializing in insurance. Mark has years of experience analyzing the insurance market and creating original research and content. He graduated from Boston College with a Bachelor of Arts and Johns Hopkins University with a Master of Arts.


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