While most people believe that 25 is the age at which car insurance rates fall, the most significant declines occur when drivers turn 19 and 21. Rates keep dropping until you turn 30. After that, they tend to stay more or less the same. Yes, car insurance is reduced when you turn 21. Car insurance declines by approximately 20% between ages 20 and 21, and car insurance premiums continue to fall every year between the ages of 20 and 30.
The fall in rates at age 21 is the second biggest age-related price change, on average. The biggest savings occur between the ages of 18 and 19, when premiums fall by about 30%. At age 25, drivers get one last major fare reduction of around 14% before rates stay in the next decade. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provision, limitation or exclusion that is expressly stated in any insurance policy.
However, while car insurance for women continues to decline at a steady rate, from 21 to 64 years old, car insurance rates for men fall lower than those for car insurance for women ages 26 to 40. Women tend to pay less than men for car insurance between the ages of 16 and 26 because they are more careful when driving and are less likely to drive at a speed or have accidents. Women tend to pay less than men for car insurance premiums until their 30th birthday, when premiums are even and sometimes higher for women. The average car insurance costs for women and men are slightly different, but drivers of all genders will see their rates drop as they approach age 25, an average of about 16 percent each year.
The cost of car insurance also depends largely on whether comprehensive or liability coverage and other external factors are maintained. However, your car insurance won't be automatically reduced when you turn 25. Drivers with accidents or record violations will continue to pay high rates even after they have passed their age outside the highest-risk age group. Auto insurance companies use statistical data, among other factors, to determine auto insurance rates. However, just because car insurance rates generally fall for new drivers over the years doesn't mean that older age gives you an advantage over younger new drivers.
In California, Hawaii and Massachusetts, age won't have a direct effect on what you pay for car insurance. That's because middle-aged drivers tend to insure newer, nicer cars and begin to include their children in the policy, which increases the average rate for this age range overall. During this age range, factors such as the type of car you drive, the number of traffic violations in your history, and your credit score are important factors in determining the increase or decrease in car insurance premiums. Just because average state car insurance is more expensive for men than for women at certain ages, that it declines slowly until age 21 and steadily declines until age is 64, doesn't mean that age is the only factor in determining auto insurance premiums.
Car insurance declines at age 25 and declines steadily until drivers turn 65, but the five years between the ages of 25 and 30 are extraordinary years for the auto insurance industry. In general, auto insurance premiums continue to fall every year until age 25, when rates begin to stabilize for the next few decades.