Does Car Insurance Go Down When You Turn 25?

Car insurance Q&A: “Does car insurance go down when you turn 25?”

Yes…and no. There are thousands of insurance companies out there with almost unlimited ways of determining insurance premium.

And there are likely a bunch of them that decrease car insurance premiums for those over the age of 25.

However, you certainly can’t call your insurer on your 25th birthday dinner at get your “XYZ percent” discount applied to your policy, nor should you expect a return premium check in the mail from you insurer when you turn 25.

The reality here is that insurance companies base their premiums on hundreds, if not thousands, of different combinations of characteristics of drivers and their vehicles.

Age, driving record, credit history and type of coverage requested come into play. Do you want liability only, physical damage coverage, PIP, Med Pay…the list goes on.

(When to opt for liability only car insurance)

Somewhere in there is your age…used in an algorithm with 100 other unique characteristics of you, your car and requested coverage.

You may not have noticed because of all the other things changing each year (age of vehicle and most important, the insurers previous year’s profits) but you likely got a discount at age 22.

You may get another minor downward bump at 30, 35, 40 or 45. But once you get “way up there” in age, expect higher rates as insurer data expects more accidents.

How Much Does Insurance Drop at 25?

The best thing about being 25 is that you can look at the 21 year-olds and laugh because they “look like children.” As far as insurance goes, it is more of a myth that your premium automatically decreases.

Every insurer is different, but you may see a slight decrease in your premium at renewal time. The premium certainly won’t change on your birthday (unless it coincides with your renewal date)…hey, there is a 1-in-365 chance that could happen!

Exactly how much is anyone’s guess. You might see a 5% or so decrease, but that won’t show up in every coverage, so you can’t reasonably expect your premium to drop 5% in total.

Looking to Save Today?

If the above information bummed you out, don’t fret. There are several ways to lower your car insurance rates regardless of age.

The first thing you can do is call you current insurer or agent and ask for a review of your policy to see if there are any missing or overlooked discounts (good driver, good student, hybrid)

If the answer to that inquiry is a “no,” ask to have your policy shopped with multiple different carriers. That will only work if you have an independent insurance agent.

And if you use a captive agent, you’ll only be able to lower your premium by reducing coverage, which isn’t recommended.

So if you just turned 25, shop around and grab a few insurance quotes to be sure you’re getting the best deal out there.