Yes, car insurance does go down when you turn 21 years old. Car insurance goes down by about 20% between the ages of 20 and 21 years old and car insurance premiums continue to decrease each year throughout your 20’s and 30’s. The 21-year-old rate drop is the second biggest age-related price change, on average. The greatest savings occur between 18 and 19 years old, when premiums go down by around 30%. At 25, drivers get one last major rate reduction of about 14% before rates level off over the next decade.
When Car Insurance Rates Go Down
% Difference from Previous Age
Most drivers experience age-related rate changes, but California, Hawaii, and Massachusetts don’t allow insurance companies to use age as a factor in determining rates. If you live in one of these states, you won’t see prices go down just for reaching a certain age.
The average cost of car insurance for a 21-year-old is $1,250 per year, or about $104 per month. Twenty-one-year-old drivers pay more for car insurance than older, more experienced drivers because insurers consider them to be high-risk, meaning they’re more likely to file a claim
Because the cost of coverage for 21-year-olds is so high, it’s important to shop around for multiple quotes before buying a policy. Some of the best car insurance companies for 21-year-old drivers are … read full answerUSAA, Travelers and Geico.
Cost of Car Insurance for a 21-Year-Old by Company
The exact cost of car insurance for a 21-year-old depends on a few factors, including their driving record, gender, and vehicle type. Additionally, whether a 21-year-old is buying their own policy or being added to their parents’ policy makes a difference.
Adding a 21-year-old to an existing policy will raise the premium by an average of 140% to 160%. But even with the added cost, it’s still a more cost-effective option than having the driver purchase their own policy.
Car insurance for a 25-year-old costs $862 per year, on average, or $72 per month. USAA, Geico, and Progressive drivers pay more for car insurance than older, more experienced drivers because insurers consider them to be high-risk, meaning they’re more likely to file a claim.
The exact cost of car insurance for a 25-year-old depends on a … read full answerfew factors, including their driving record, gender, location, vehicle, and car insurance company. Some of the best insurance companies for 25-year-old drivers are USAA, Geico and Progressive.
Cost of Car Insurance for a 25-Year-Old by Company
The cost of car insurance typically goes down the most between the ages of 18 and 19, when rates drop by about 25% on average. Car insurance premiums generally continue to go down each year until age 25, when rates begin to level off for the next few decades. When drivers turn 25 years old, they can expect a discount of about 14%.… read full answer
Note: The table above shows average annual rates for minimum coverage across all 50 states.
Around middle age, rates may begin to creep back up. This is because middle-aged drivers tend to insure newer, nicer cars and begin to add their children to the policy, increasing the average rate for this age range overall. Individual rates also start to go up again between the ages of 65 and 75 because senior drivers have a higher risk of accidents than middle-aged drivers.
Why Age Affects Car Insurance
Age affects car insurance rates because it’s an indicator of a driver’s risk to an insurance company. Young drivers are statistically more likely to get into a car accident than older, more experienced drivers. As a result, they’re considered high-risk and are more expensive to insure.
The risk for the insurer and the cost for the insured then generally decline as drivers age and gain experience. Once drivers pass the age of 65, however, their risk starts to go up again. Not only are senior drivers more likely to get into an accident than middle-aged drivers, but they’re also more likely to be injured as a result.
States Where Age Does Not Affect Rates
Although most people in the U.S. will find their prices change according to this timeline, there are a few states in which insurers can’t use age to determine your rate. In California, Hawaii, and Massachusetts, age won’t have a direct effect on how much you pay for car insurance. Other factors will still have an impact, though. Your driving record, credit score, and marital status can all affect your final premium.
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