Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Written by Shuman Roy
Content Writer & Entrepreneur Shuman Roy

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jun 28, 2022

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It should be noted that there are thousands of car insurance companies out there with almost unlimited ways of determining insurance premiums. And there are likely a bunch of them that decrease car insurance premiums for those over the age of 21. Although, a discount for turning the legal drinking age seems a little counter-intuitive. But the big question is: Do insurance rates go down at 21?

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Do insurance rates go down at 21?

Maybe, but probably not. You certainly can’t call your insurer on your 21st birthday dinner to 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 21.

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, insurance score, and type of coverage requested come into play. Do you want liability only, physical damage coverage, PIP, Med Pay…the list goes on.

Somewhere in there is your, used in an algorithm with tons of 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 your vehicle, for instance, and most importantly, the insurer’s previous year’s profits), but you’ll likely get a discount at age 25, not 21.

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How does age affect auto insurance rates?

Car insurance for teens tends to be the most expensive because they are inexperienced drivers. From there, drivers usually see a steady decrease in their auto insurance costs. Drivers may see lowered rates around age 19, and then again at age 25. Insurers assume that as you spend more time behind the wheel, your driving skills improve, and you’re less likely to cause an accident.

You may get another minor downward bump at 30, 35, 40 or 45. Middle-aged drivers pay the least for car insurance. However, senior drivers can expect higher rates as insurer data expects a higher risk of accidents and subsequent insurance claims.

As always, you’ll need to keep a clean record in order to see drops in your auto insurance rates. Enter your ZIP code above right now to get a FREE auto insurance quote today.

How long does it take for your insurance to go down?

If the above information bummed you out, don’t fret. There are several ways to lower your car insurance rate 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 discount, etc.)

If you bundle your auto insurance with renters insurance or homeowners insurance, you might get a multi-policy discount. Some insurance carriers offer a discount to those who take a defensive driving or other driver education course.

A usage-based insurance program can also lower your rates. These programs use a telematics device to monitor your driving habits and issue you a discount for safe driving.

If there aren’t any discounts that can be applied, ask to have your auto insurance policy shopped with multiple different carriers. That will only work if you have an independent insurance agent.

Assuming you use a captive agent, you’ll only be able to lower your premium by reducing coverage or raising your deductible, which isn’t recommended. So if you just turned 21, shop around and grab a few insurance quotes to be sure you’re getting the best deal out there.

In addition to age, auto insurance companies factor gender, location, driving record, credit score, and more into your rates, and each company has a slightly different formula for evaluating these factors. So if one company is charging you a high rate because you don’t have good credit, you might be able to find another company that doesn’t weigh this particular factor quite as highly.

Just about every company uses driving history as one of the biggest factors, so do your best to keep your record clean so you can find affordable rates.

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