Does Car Insurance Go Down at Age 25?

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Written by
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Reviewed by
Farmers CSR for 4 Years
UPDATED: 2022-08-03T08:51:38.007Z
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Do you remember the thrill of getting your driver’s license as a teenager? The first thing that probably comes to mind is the newfound freedom that comes with your first real taste of adulthood.

What you might not remember is how shaky your driving skills were at first. In your first few months and even throughout the first few years of driving, you haven't had enough time to build the skills to become a great, safe driver. With time, experience, and practice, you improve.

Your car insurance company knows all of this — and that younger drivers pose a greater risk to their bottom line.

But when does your car insurance go down?

Your insurance rate usually goes down when you hit the magical milestone of 25 years old. In this article, we’ll discuss why. We’ll also go over some of the strategies you can use to decrease your car insurance costs and keep more money in your wallet. One of the best ways to save on your car insurance is to get quotes from multiple sources, and a great way to do that is with our free search tool.

Why Does Insurance Go Down at Age 25?

This insurance price drop that most drivers see at age 25 isn’t an arbitrary car insurance discount or a birthday present.

Because car insurance companies know that teen drivers and young adults are more likely to make mistakes while driving, younger demographics will have a higher auto insurance premium.

It’s in the interest of your insurer to save money, and they estimate having to spend more money on repairs and other payouts for less experienced drivers. So, to account for the higher risk, younger drivers pay more.

Insurance companies have used risk analysis to determine that adult drivers generally take fewer risks. By comparing statistics on age, accidents, costs for repairs, and risks taken while driving, insurers assume that 25-year-olds are less of a liability than younger drivers.

What About Other Age Milestones?

It’s important to note that the drop isn’t a sudden, steep cliff.

Although many drivers will see a greater decrease when they turn 25 than in previous years, it’s most accurate to say that prices for insurance rates steadily decrease throughout your late teens and twenties (assuming your clean driving record stays the same).

The peak for prices is generally around 18.

Of course, your specific premium may go down less (or not at all) depending on demographic factors as well as their driving records.

Changes at 25 for Male vs. Female Drivers

It’s commonly known that there is a gender divide in insurance prices. Young men have higher prices than young women because they’re statistically riskier drivers and generally spend more time behind the wheel.

Men in their teens and twenties get into the most accidents across the board, so they have the highest prices of any demographic.

Because their rates are higher to begin with, men see a greater decrease when they hit 25.

By that time, drivers of both genders usually have a more substantial history. That means that men and women will begin to see more similar premiums.

Is the Gender Divide Universal?

Across the United States, different states have different regulations regarding what can be used as a determining factor for insurance costs. In some states, insurance companies are not permitted to charge differently by gender.

The following states have laws dictating that insurers cannot account for gender when calculating rates:

  • California
  • Hawaii
  • Massachusetts
  • Michigan (some areas)
  • Montana
  • North Carolina
  • Pennsylvania

Therefore, 25-year-old men and women can expect to see a similar drop when purchasing insurance in these states.

Reasons Why Car Insurance Might Not Go Down at 25

When calculating how to adjust your insurance rates from year to year, insurers take factors besides age into account.

Some of these can be even more influential, so it’s important to take them all into consideration when understanding why your insurance rate has or hasn’t changed.

The following all play a role in your insurance rates:

  • Age First Insured – The assumption that insurance companies make when calculating rates by age is that older drivers have more experience. That is not necessarily true for everyone. If you got a late start with driving and the first time you buy car insurance is in your early twenties rather than your late teens, you will have higher rates than a younger driver who got their licenses as soon as possible.
  • Driving Record – Your driving record helps companies estimate whether you’re a risky driver. Collisions, speeding tickets, and other moving violations go on record as a part of your driving history. Not all individuals within a demographic are as risky as others. If your driving habits include recklessness or accidents, your premiums may stay high as you get older.
  • Credit History – Just as with other kinds of insurance, you’re more likely to have lower rates if you have a better credit score. A credit score is used as an indicator of your financial history and risk. Good credit means you have been responsible for making your loan payments, insurance payments, and other potential risk factors. Certain US states are the exception to this rule. In California, Massachusetts, and Hawaii, insurance companies are not allowed to use your credit score as a factor when calculating your rates.
  • Location – The state and zip code that you live in can drastically change your base rates. If you live in an area with a higher prevalence of criminal activity, you will have higher insurance costs. This is because your insurance company is anticipating a higher risk of theft, vandalism, or other damages. Likewise, urban drivers tend to may more because they have more exposure to other vehicles.

If you get in an accident, move to a new city, or default on a loan before your 25th birthday, you may not see the insurance savings you’ve been looking forward to.

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How to Deliberately Decrease Your Auto Insurance

Whether your rates drastically decrease at age 25 or not, there are a variety of strategies that you can use to get cheap car insurance.

The following dos and don’ts will be very helpful for you in regards to saving money on your car insurance.

  • Don’t Use Your Parents’ Insurance – If you are 25 or older and are still using your parents’ insurance policy, odds are that you are paying more than necessary. You should switch to an independent plan so that any negative influences are coming from your actions alone.
  • Do Shop Around for Deals – There are hundreds of insurance providers, and rates vary dramatically between them. Do some research into both local and national providers. Some insurers may offer special rates for full-time students, people with good grades, or other demographic groups. This can result in a much better deal for young drivers. Further, continue to check in periodically after purchasing your policy. If you find a better deal elsewhere, see if your current insurer can match it (and consider switching if they can’t).
  • Don’t Buy What You Won’t Need – There are many kinds of auto insurance, some of which may be excessive for your individual situation. A car with a few hundred thousand miles doesn’t need to be insured the same way as a shiny new sports car. When a car is new, collision and comprehensive insurance coverage can be a good idea. But as your car’s value depreciates over time, these extra expenses may not be worth it.
  • Do Consider Your Deductible – Your deductible is the amount you’ll pay out of your own pocket to cover any repairs, pay-outs, or medical bills. When you agree to a higher deductible, you’re taking on more risk (and thus mitigating your insurer’s risk). Selecting a higher deductible can therefore decrease your yearly premium.
  • Do Share With Your Spouse – If you have a spouse, telling your insurance provider could save you money. Married couples are regarded as more financially stable and less prone to risk, making them an overall safer investment for the insurer. Sharing a policy with your partner can decrease rates for both of you.


There are many ways you can decrease your rates without having to restructure your plan or switch to a different insurance provider.

  • The following are potential ways to decrease your car insurance rate:
  • Taking defensive driving lessons
  • Installing enhanced safety features
  • Proving you drive a low yearly mileage
  • Enrolling in e-billing or auto payment
  • Bundling auto insurance with other insurance policies

According to Experian, improving your credit score can also prove invaluable. Adopting these strategies and hunting for deals can seriously pay off. You could potentially save hundreds of dollars with minimal effort.

Finally, don’t be afraid to ask about potential savings! Sometimes, simply asking questions can help you discover discounts that you never would have known were available.

Don’t get frustrated by high rates. Instead, take advantage of potential savings.

Make Your Auto Insurance Work for You

While most drivers will see lower rates starting at age twenty-five, drivers of all ages can save on insurance by understanding the factors that go into their rates and shopping around for the lowest insurance premium.

But with so many options, where should you start?

We provide comprehensive insurance comparison tools that allow you to see quote estimates from a wide variety of insurance providers. Simply enter your ZIP code, and you’ll be able to see real numbers in real-time.



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