Does Car Insurance Go Down At 25? Yes

Young drivers under 25 make up 5.3% of the total drivers in the US. However, completing a driver’s education course and obtaining a license is just the beginning of it.

Both male and female drivers require insurance coverage to keep themselves – and their vehicles – safe. Car insurance policies are not exactly cheap, but there’s been a hint that your auto insurance premium might drop when you reach 25.

Car insurance DOES go down after a driver turns 25, but there isn't a drastic difference in price. Share on X

These are just some of the questions we’ll be getting into today:

  • How much is auto insurance coverage for young drivers?
  • Why is auto insurance premium getting more expensive each year?
  • Can I save money by comparing different quotes?
  • Does driving performance influence coverage?

Scroll down, and we’ll discuss insurance rates by age, how much it goes down and whether there are some mitigating factors to this change in price.

Will Car Insurance Go Down When I Reach 25?

In short, yes.

After you’ve celebrated your 25th birthday, you can count on car insurance premiums going easier on you.

But how much are we talking about here?

Car insurance companies charge their clients that haven’t reached 25 yet about $4,000 a year. But once you finally get to 25, you can count on a little discount:

Now, your annual car insurance rate is going to be around $3,00o a year.

It’s not exactly cheap car insurance per se. Sure, younger drivers will pay more money for some time – but the difference isn’t life-changing.

But will you save money?

Well, the decrease in price is about 11%, so yeah, you could say that.

Good Student Discount

Here’s something to look forward to – high school and college students can save up between 6% and 36% percent with this discount.

How do I get a good student discount?

Well, you have to be a student first. But that’s just half of the job – you need to meet a couple more requirements, including:

  • To be between the ages of 16 and 25
  • To be enrolled in high school or college (full-time)
  • To be single
  • Maintain a B average

This discount might help you save cash, but it’s only one small portion that determines how much you’ll be paying at a yearly rate.

Can homeschool students count on this, too?

Not all insurance companies offer discounts for homeschool students. If you’re homeschooled, you should contact your insurance company directly and see if you’re eligible for this discount.

Car Insurance Rates Per State – Annual Costs Of Minimum And Full Coverages

In each state, the laws for auto insurance rates are different. By being aware of the minimum and full coverage in your state, you’ll find it easier to connect with the best insurance carrier.

Bear in mind that you CAN NOT purchase a car insurance policy below the minimum coverage limits in your state.

We believe that it’s always helpful to have a visual representation, so let’s get right to listing down the auto insurance rates for different states:

  • Alabama: $469/$1,623
  • Alaska: $373/$1,559
  • Arizona: $555/$1,547
  • Arkansas: $470/$1,914
  • California: $733/$2,065
  • Colorado: $518/$2,016
  • Connecticut: $794/$1,845
  • Delaware: $787/$1,775
  • Florida: $1,101/$2,364
  • Georgia: $756/$1,982
  • Hawaii: $354/$1,127
  • Idaho: $307/$1,045
  • Illinois: $442/$1,485
  • Indiana: $367/$1,254
  • Iowa: $252/$1,260
  • Kansas: $410/$1,698
  • Kentucky: $748/$2,128
  • Louisiana: $975/$2,724
  • Maine: $294/$965
  • Maryland: $767/$1,877
  • Massachusetts: $510/$1,233
  • Michigan: $$948/$2,309
  • Minnesota: $537/$1,643
  • Mississippi:$492,/$1,782
  • Missouri: $468/$1,661
  • Montana: $342/$1,737
  • Nebraska: $335/$1,531
  • Nevada: $860/$2,245
  • New Hampshire: $389/$1,275
  • New Jersey: $847/$1,757
  • New Mexico: $385/$1,419
  • New York: $1,062/$2,321
  • North Carolina: $413/$1,325
  • North Dakota: $285/$1,264
  • Ohio: $328/$$1,034
  • Oklahoma: $423/$1,873
  • Oregon:$610/$1,346
  • Pennsylvania: $427/$1,476
  • Rhode Island: $749/$2,018
  • South Carolina: $558/$1,512
  • South Dakota: $275/$1,642
  • Tennessee: $371/$1,338
  • Texas: $524/$1,823
  • Utah: $528/$1,306
  • Vermont: $292/$1,207
  • Virginia: $441/$1,304
  • Washington: $463/$1,176
  • Washington, DC: $704/$1,855
  • West Virginia: $458/$1,499
  • Wisconsin: $332/$1,186
  • Wyoming: $271/$1,495

If you look at these insurance rate quotes, you might notice that they differ according to:

  • Driving history
  • Age group
  • Country
  • Vehicle
  • Marital status

Average rates are not the same for every country, though. For example, in countries that are more prone to storms and tornados, higher average car insurance rates are expected.

Why Are Car Insurance Premiums Going Up Each Year?

You hear it on the news, and you read about it online. What’s the deal with higher premiums?

Why do drivers pay higher prices in some states?

A new driver might find it hard to believe – but certain factors dictate the price of your auto insurance and might make it go up significantly.

Insurance Data In Your Zip Codes

You can expect higher premiums if your city has a “bad reputation” and is known for incidents like theft, arson, and even murder.

Even if you have a good driving record, you’ll still be required to pay a higher price than usual.

That’s how the insurance company secures its profit; they don’t want to risk it.

Moving

Moving to another city won’t change much. However, if you’re moving out of state, you’ll be required to buy a new policy. It’s crucial to consider the existing car insurance quotes there:

If you’re moving from Virginia to Florida, where car premiums reach $2,500, for example, be prepared to pay up.

Adding Vehicles And New Drivers

Having one vehicle in your possession is expensive enough. Imagine having more than one or purchasing a sports car or motorbike.

You have to purchase insurance for these new vehicles, too – and it’s going to cost you. The good news is that a multi-car policy is usually cheaper.

However, adding new drivers, especially teenagers or male drivers with poor driving history, to your policy might make your insurance go up.

Comprehensive Claims

Insurance companies might ramp up prices regardless of your driving experience or vehicle numbers. What do we mean by that?

Comprehensive coverage.

Despite the fact that it’s one of the most expensive ones, it applies to incidents that are out of your control – setting off alarms, vandalism, purposeful glass breakage, and weather-related damage, to name a few examples.

Recurrent Accidents

Similar to traffic violations, if there’s a rise in the number of at-fault accidents that could flaw your clean driving record, your auto insurance costs will go up.

Several insurance companies have already taken the initiative to charge their clients.

Now would be the right time to think about anti-lock brakes. If you’re afraid you could lose control of your vehicle, this might be a useful tool.

Oh, and consider getting life insurance while you’re at it.

Speeding Tickets

If you’re an owner of a sports car, speeding tickets are nothing new to you. Even with good driving habits, you’ll likely pick up a couple of them.

And as expected, teenage drivers are more prone to this kind of behavior.

Age

You’d probably think that insurance costs are the most expensive for new drivers, but you’re wrong. Insurance rates go up with age – and senior drivers are the ones that will pay the most.

Simply put, if you’re in your 60s, you could expect higher premiums.

Why?

Because insurance companies stand by the fact that older drivers fall in the “high-risk age group” and are more prone to accidents – and that’s why they ask them to pay a couple hundred more.

Loss of Discounts

Insurers offer discounts – but keep in mind that they are not forever, and they have certain conditions.

If you find yourself in an accident or earn a couple of negative points, you’ll lose your no-claim bonus, and your discounts will become invalid.

Poor Credit Score

Unfortunately, insurance companies will generally factor in your credit score when determining the average insurance rate you’re obliged to pay. So, if you have a bad credit score, you could be looking at a more expensive bill for car insurance.

All in all – car insurance costs are going up, and you don’t have a say in it.

Examples of Average Car Insurance Rates

You need real numbers – and that’s what we’re going to focus on here.

We’ve mentioned how car insurance rates can go up in certain situations – so, let’s look at a couple of examples.

After An At-Fault Accident

After being involved in a car crash you’re responsible for, the insurance rates can jump by 50%. So, the numbers might look a bit like this:

  • Minimum coverage: $884
  • Full coverage: $2,349

For Good And Bad Credit History

Insurance companies are pretty strict when it comes to your credit rating – they can ramp up your costs by 75%.

Good credit history:

  • Minimum coverage: $565
  • Full coverage: $1,592

Bad credit history:

  • Minimum coverage: $984
  • Full coverage: $2,812

After A DUI

Drinking and driving will be punished by an increase of 87%. Here’s what an average adult will have to pay for after getting caught drinking and driving:

  • Minimum coverage: $1,152
  • Full coverage: $3,114

It’ll make you think twice before you take a sip of booze and sit behind the wheel, huh?

A couple of other factors that could lead to a rise in the price are:

  • Your job or occupation (depending on the state where you live)
  • Your previous insurance company
  • If you’re categorized as a high-risk driver
  • Annual mileage
  • Whether you own a home or homeowners insurance
  • Additional coverage options (if you choose to include some)
  • Who do you live with
  • Driving performance and driving record

Is There A Difference Between Male And Female Drivers?

According to statistics, at the age of 25, men pay $98 more per year. So, yes, auto insurance is more expensive for male drivers in general – and especially for younger drivers.

Why Do I Need Car Insurance?

Well, for starters, car insurance is mandatory in most states.

A car insurance policy is a contract between you and the insurance agent. If you end up in a car accident – or someone steals or damages your car – you can count on this to help you out financially.

Let’s go briefly over what’s typically covered:

  • Property – If your car gets damaged or stolen
  • Liability – Your legal responsibility to other drivers for bodily injury
  • Medical Payments – The cost for treating injuries, hospital visits, etc.

On a related note, car insurance costs are another term for bills. It applies to the amount of money that you have to pay to keep your auto insurance valid. It’s usually paid in installments over the course of 6 months or one year – depending on the coverage you opt for here.

Like the insurance policy itself, it’s mandatory – but the rates don’t have to be that high if you choose the right provider.

Take PIP for example – it’s mandatory in many states.

The fact that most state requires drivers to take a minimum auto liability coverage makes it important.

Why?

Financial Protection

If you happen to have a car accident, and the police determine that you should be held responsible – you’ll have to pay for the damage caused.

That’s the moment when you should pat yourself on the back for keeping your car insurance going.

Possible costs can include everything from repairing someone else’s car to medical payments for injuries received by the opposite driver. Here’s where the liability coverage stands out because you would have to pay everything out of your pocket without it.

Personal Protection

Keeping yourself protected is just as important.

Drivers often make the mistake of driving without liability coverage. No one is accident-free – not even experienced drivers. Personal protection means a lot, especially if you are injured and need to pay your medical bills.

Whether it’s damage to your car, property, or a bodily injury – auto insurance policies can help you.

The Pros And Cons Of Purchasing Car Insurance Online

Purchasing car insurance online has its good and bad sides. After going through average rates, let’s talk about how they influence the policyholder.

Pros

  • If you decide to look up insurance policies online, you’ll be met with more options than usual. You’re even offered to compare different quotes and see which one fits your requirements.
  • There are companies that offer you various discounts after you’ve chosen them. You might save more than you thought.
  • With online purchasing, there’s no endless filling out the forms. Everything is efficient, quick, and, most importantly, stored virtually, so you don’t lose it.

Cons

  • By now, you’ve learned that not everyone that is promoting something online wishes you the best. There are a lot more fraudsters than you can imagine, and people often fall for their schemes. It can happen to anyone.
  • There’s a chance that the auto insurance quote won’t be accurate if you fail to fill in some of your personal information.
  • There may be occasions where you’ll be denied the insurance policy. That includes a previous DUI, being categorized as a high-risk driver, and so on.

Car Insurance FAQs

We’ve covered a pretty good deal of car insurance and the topic of young drivers – but there’s still time to go through some common questions once again. You know, for good measure.

Q: Is Car Insurance More Expensive For Men Than For Women?

A: According to statistics, men pay about $98 more than women per year – not a drastic difference, but a difference, nonetheless.

Q: How Much Can I Save By Comparing Quotes?

A: By actively comparing quotes and searching for the best deal and competitive rates, you can save up to $300.

Q: Does My Car Choice Affect The Price?

A: Yes, as we mentioned a while ago, luxurious and sports cars carry a higher car insurance premium with them because they’re worth more money, pack more horsepower, there’s an increased risk of theft.

Q: Can I Expect A Penalty If I Cancel The Policy?

A: As long as you do everything by the rules, you’ll avoid being penalized.

Q: Why Is Insurance More Expensive For Unemployed People?

A: Car insurance policies are 30% higher for unemployed individuals. Someone who’s unemployed will be considered high risk due to different driving habits – increased mileage and risk of theft – and the fact that they might not be able to afford vehicle maintenance.

Wrapping Up

It’s true what you heard – car insurance drops after you reach the age of 25 – but don’t get your hopes up. You’ll be able to save some money, but it’ll amount to roughly 11%.

Before you decide to purchase a policy, you might want to look up average insurance prices per state. They vary considerably – and you might end up paying more than you expected to.

There’s also been a lot of buzzing about insurance premiums rising each year – and again, it’s true. But this has a background story to it. You see, auto premiums rise due to location, moving, age, and driving experience, to name a few.

If you’re a young driver looking for car insurance quotes, let us give you a helping hand:

At Insurance Geek, we offer you a tool that allows you to compare insurance quotes COMPLETELY FREE! We made it our mission to connect you with the best insurance carriers and help you choose the best deal.