When you received your driver’s license, you might’ve been shocked by how much you had to pay your insurance company—and you didn’t even have an accident yet. You couldn’t wait to turn 25 and have those high car insurance rates finally come down. After all, it’s commonly thought that car insurance premiums automatically drop for drivers at age 25.
Not so fast.
There’s no magic age threshold that leads to a drop in vehicle insurance rates. It’s more of a gradual decline when it comes to the correlation between car insurance rates and age. The age curve varies by insurance company.
What factors into my car insurance rate?
One thing that does impact insurance policy rates for all insureds, but particularly at younger ages, is whether an insurance score is factored into the cost. Some insurance companies, like Dairyland®, won’t pull an insurance score for teenage drivers.
A 25-year-old who has done some work to establish and improve his or her credit score—which ultimately relates to their insurance score—may reap rewards as it relates to his or her car insurance premiums.
Other factors that may impact insurance rates of young drivers include the year, make, and model of the vehicle; driving habits (like the number of miles driven each year); the garaging location of the car; safe driving record; deductible; and how the vehicle’s used.
Young drivers who are homeowners or are married may qualify for car insurance discounts, providing additional savings.
Of course, there are also things that will increase rates. If your driving history has traffic violations or accidents, if you’re living in a more populated area, you had your credit score drop, or you added drivers, you may see higher premiums that have you paying more for collision coverage.
So, remember, your 25th birthday isn’t the end-all determining factor when it comes to insurance premiums. This myth is debunked.