At What Age Does Car Insurance Start to Go Down?

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Updated: May 20, 2024

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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

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.

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

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.

Why Trust MoneyGeek? MoneyGeek developed an internal study and collected data from various insurance providers for different driver profiles in order to demonstrate the fluctuation in car insurance premium rates by age. Additionally, we determine the specific ages at which policy prices decrease the most, as well as what other factors affect the decline in cost over time.

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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.

It isn’t surprising, though, that most people think 25 is when insurance rates go down. A 2018 survey by the AAA Foundation for Traffic Safety found that at least 60% of American drivers get their license before age 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 and get to enjoy more affordable rates.

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

You can also 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.

Price Reductions at Different Companies for Turning 25
Percent Decrease





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Car insurance rates are typically higher for young drivers, so it pays to shop around to find the cheapest car insurance companies.

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
Extra Amount Paid by Males









































The table 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
Extra Amount Paid by Males









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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

Sixteen-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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Age 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.

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 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.


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.


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. But taking proactive steps, like taking a defensive driving course and working on your credit score, can help drivers lower their insurance costs and receive more affordable premiums.

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.

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.

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.

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.

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.

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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.

By how much does car insurance go down each year?
When does car insurance go down for teenagers?
Is it true that when you turn 25, your insurance goes down?
How much do car insurance premiums decrease on average once you turn 25?
How can I lower my insurance rates?
What’s the average cost of car insurance for a 25-year-old driver?

About Mark Fitzpatrick

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Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.