If you’ve reached age 25, you’ve probably come a long way from your inexperienced 16-year-old self. You can better control your impulses and make more informed decisions about your future. You also have more years of driving experience behind you, which means that while your patience for traffic might start to decline, your car insurance rates will as well. Insurance companies don’t drop premiums on a common schedule, but they will reduce your rates as you age and maintain a clean driving record. That means you could get a lower insurance premium at 25 than you have ever been able to get previously.
But what if you turned 25 and your car insurance rate didn’t decrease, or you’re younger than 25 and struggling to pay your premiums? It might be time to switch insurance companies. Some auto insurance providers can provide lower premiums than others to younger drivers. The best way to make sure you get the best deal is to use Insurify to compare customized car insurance quotes side by side. You’ll see rates from multiple insurers based on your age so that you can easily identify the cheapest deal for the coverage you need.
In this article
- How does age effect car insurance rates?
- How do gender and location effect car insurance rates?
- Best Car Insurance Companies for Drivers in Their 20s
- Cheapest Car Insurance Quotes for Drivers in Their 20s
- Best Auto Insurance Discounts for Drivers in Their 20s
- Car Insurance Tips for Drivers Under 25
- Conclusion: The best way to compare and save on car insurance
How does age affect car insurance rates—and why do younger drivers pay more?
When you apply for a car insurance policy, the provider will assess your level of risk to determine your premium. Essentially, insurers charge drivers higher premiums when they believe they’ll be more likely to file a claim. They base that likelihood on historical data. Aside from teen drivers, drivers ages 20–24 get in more crashes per 100 million miles driven than any other age group and are more likely to be involved in a fatal crash than any other age group. It doesn’t matter if you have safer driving habits than all your friends—insurance companies will still view you as a risk because of your age.
Will my car insurance go down at 25?
Your car insurance premiums might decrease at age 25, especially if you’ve kept a spotless driving history for the last five years. Auto insurers tend to give experienced drivers lower rates. In fact, drivers at age 24 pay an average of $268 monthly for car insurance, while 25-year-old drivers pay an average of $249. That’s a 7 percent decrease in one year.
However, don’t expect an immediate discount on your birthday. You’ll likely notice a decrease in your auto insurance premium when you are billed for renewal. This is a good time to compare your premium against rates that other auto insurance companies are offering. You can use Insurify to quickly and easily get multiple auto insurance quotes at once so you can check for lower rates.
Keep in mind that it’s also possible for a 25-year-old to be charged higher rates on an auto insurance policy than the year prior. This can happen if you’ve been in an accident, incurred traffic violations, or been convicted of a DWI/DUI.
In general, though, car insurance rates tend to decrease with age. The exception is older drivers in their 70s and 80s, who tend to pay slightly more than younger folks. The average monthly premium for drivers in their 20s is $257. That’s a much better average rate than teen drivers pay ($424/month on average), but drivers in their 30s and 40s can hope for lower premiums. The average premium for drivers in their 30s is only $190 per month.
How do gender and location affect car insurance rates?
Just as insurance companies look at your age when assessing your risk, they’ll also use gender and location data when giving you a quote. A good driving record can go a long way in offsetting increases due to other factors, but you might pay a higher premium if you’re male or live in an urban area.
That’s because women are statistically less likely to get into a serious accident or a DUI crash. And urban areas tend to have higher rates of vandalism and theft as well as problematic traffic that leads to more accidents.
Best Car Insurance Companies for Drivers in their 20s
Some car insurance providers are able to provide lower auto insurance rates than others to younger drivers. Using premium data from thousands of policyholders, we chose the companies with the lowest premiums that were available in the majority of states. We narrowed down our top choices further based on financial strength and customer satisfaction ratings. Here are our top picks for the best auto insurance providers for drivers in their 20s.
With an average car insurance rate of just $122 per month, Farmers is one of the cheapest providers for drivers under the age of 25. Furthermore, Farmers has an A (excellent) financial stability rating with A.M. Best and ranked above average in the J.D. Power 2020 U.S. Auto Claims Satisfaction Study. Not only can Farmers provide one of the best rates for drivers in their 20s, but the provider also offers several car insurance discounts that will appeal to young and new drivers, including:
- Safe driver discount
- Youthful driver discount
- Discounts for good grades
- Distant student discount
Clearcover provides insurance coverage to young drivers under the age of 25 at an average monthly premium of just $182, making the company one of the cheapest options available for inexperienced drivers. What’s more, Clearcover offers an easy online quote, application, and policy management for young people who would rather transact online than deal with an insurance agent.
Clearcover also has a great reputation for customer service and an A- financial stability rating from A.M. Best. Clearcover doesn’t offer bundling discounts, since the provider doesn’t currently offer homeowners or renters insurance. Other discounts, such as those for good drivers, safety features, and up-front payments, are baked into Clearcover’s low premiums so you won’t have to ask about your eligibility.
With an average premium of $203 per month, Metromile is one of the most affordable car insurance companies for drivers under the age of 25. Metromile is a great fit for policyholders who don’t drive frequently since rates are based on your mileage and driving habits. Metromile reports that customers save an average of 47 percent when they switch.
It’s important to note that Metromile is not rated by A.M. Best or J.D. Power. Customer service reviews on third-party websites are generally favorable but aren’t the best in the industry. Metromile doesn’t offer additional discounts, either, but many young drivers will still be able to save by switching.
With an average monthly premium of $248, Travelers is cheaper than many other providers for drivers under the age of 25. Travelers also has a great reputation for financial stability, with an A++ rating from A.M. Best. However, the company’s J.D. Power ranking in the 2020 U.S. Auto Claims Satisfaction Study was below average.
As one of the largest auto insurance providers, Travelers offers a myriad of discounts that might attract young drivers, including:
- New car discount
- Driver training discount
- Good student discount
- Student away at school discount
- Safe driver discount
Honorable Mentions: Cheapest Car Insurance Quotes for Drivers under 25
Some of the cheapest auto insurance providers for drivers under 25 aren’t licensed to sell policies in all states, and some are more reputable than others. Still, the following car insurance companies are worth mentioning because of their low average rates for young drivers.
|Insurer||Average Premium||State Availability||A.M. Best Rating|
|Amigo USA||$173||Illinois, Indiana, Wisconsin, Texas||Not rated|
|United Security Health and Casualty||$185||Arizona, Arkansas, Illinois, Indiana, Missouri, Nebraska, Oklahoma, Texas||C+|
|Freedom National||$203||California, Arizona, Utah||Not rated|
|Anchor||$209||California, Arizona, Washington, Oregon||B|
|Motion Auto||$215||Arizona, Utah||Not rated|
|AssuranceAmerica||$218||Alabama, Arizona, Florida, Georgia, Indiana, Missouri, Nebraska, South Carolina, Texas, Virginia||Not rated|
|Elephant||$223||Illinois, Indiana, Maryland, Ohio, Tennessee, Texas, Virginia||Not rated|
|Bluefire||$224||Alabama, Arizona, California, Indiana, Illinois, Mississippi, Louisiana, Texas, Washington, South Carolina||Not rated|
The best way to find the cheapest auto insurance for young drivers in your state is to use Insurify to compare customized quotes. You’ll see rates from regional and national carriers, and you’ll be able to toggle between coverage limits and deductible amounts to find a policy that fits your budget. Once you’ve narrowed down your options, just be sure to do your research to ensure the company you choose provides reliable service and is able to pay claims.
Best Auto Insurance Discounts for Drivers in their 20s
Some of the best car insurance companies offer discounts specifically targeted toward drivers in their 20s. These can help to offset the high cost of insurance for drivers under the age of 25.
Good Student Discount
Some insurance companies offer discounts to students in high school or college who get good grades. You typically have to maintain a B (3.0) average to be eligible, and discount amounts vary by company.
Distant Student Discount
If you leave your car at home while you’re at least 100 miles away at school, you or your parents can get a discount on your policy, sometimes as much as 25 percent.
Other Discounts for Drivers under 25
|Accident-Free||Some insurers provide discounts after a period of no accidents, such as three or five years.|
|Safe Driver||If you practice safe driving habits, which are sometimes monitored by telematics, you can get a discount on your policy.|
|Low Mileage||You can save if you keep your mileage low, and in some cases, you can pay by the mile.|
|Multi-Policy||Bundle your auto insurance policy with your renters or homeowners insurance to save up to 25 percent.|
|Multi-Car||If you have two cars or can share a policy with your roommate or parents, most companies will offer you a discount.|
|Payment||Many insurers offer discounts for paying in full, electronic payments, and more.|
|Loyalty||If you stick with the same company, you can often earn a discount. However, you should still regularly compare premiums across insurance providers.|
Car Insurance Tips for Drivers under 25
Besides asking about discounts that you might be eligible for, there are a few ways you can save on your car insurance policy.
Shop Around for Car Insurance
Different insurance companies will weigh your information differently, so some providers will be able to offer you lower premiums than others. Furthermore, some insurance companies can provide lower rates to younger drivers. That’s why you should always use Insurify to compare car insurance rates. You’ll find quotes from major companies like GEICO and Progressive and smaller regional insurance providers. We’ll show you the lowest premium first, but always do your research to make sure the company is reputable.
Increase Your Deductible
It’s a good idea to purchase comprehensive and collision coverage, since these protect your finances if you cause an accident. But if you’re finding that these coverages are making your premiums unaffordable, try increasing your deductible. A higher deductible results in lower premiums, and vice versa. Just make sure you have enough stashed away in an emergency fund to cover your deductible amount since that’s the amount you’ll be financially responsible for if you cause an accident.
Improve Your Credit Score
In most states, with the exception of California, Hawaii, and Massachusetts, insurers use information from your credit-based insurance score when determining your premium. That’s because research has shown a correlation between low scores and a higher likelihood of filing a claim. Your credit-based insurance score is made up of some of the same factors that influence your FICO score, so keeping up with your bill payments, resolving any errors, and paying down debt will help improve your chances of getting a lower premium.
FAQ: Does your car insurance go down at 25?
Does the cost of your car insurance go down at 25?
Generally, your car insurance rates will decrease as you age from your teens to your 30s. Drivers in their teens pay an average of $424 per month, while drivers in their 20s and 30s pay $257 and $190 per month, respectively. Your insurance rates might not drop on your 25th birthday, but you’ll likely see your premium decrease when your policy renews, assuming you’ve kept a clean driving record.
Where can I compare car insurance quotes online for free?
Insurify is a great tool for comparing car insurance quotes online for free. You’ll just need to answer a few questions about your vehicle and driving history, and our artificial intelligence technology will find you quotes from multiple insurers so you can easily find the best deal for the coverage you need.
How does safe driving keep car insurance rates low for a driver in their 20s?
Some companies reward safe driving habits, but the bigger reason to drive safely is to avoid an accident. Most insurers will raise your rates after an at-fault accident unless you have accident forgiveness.
At what age do insurance companies stop using age as a factor for rates?
Insurance companies will always use age as a primary factor when determining your annual premium. Your rates will likely decline through your 30s, 40s, and 50s, but then you might get a slightly higher rate in your 70s and 80s.
Conclusion: The best way to compare and save on car insurance
Every insurance company weighs your age differently, and some companies can provide younger drivers with lower rates than others. To ensure you get the lowest premium, you should compare insurance quotes from at least a handful of insurance companies. Though shopping for insurance used to be a time-consuming process, you only need to enter your information once with Insurify, and our artificial intelligence technology will quickly display the companies offering the lowest premiums for you. You can toggle between coverage and deductible amounts, check out our ratings, and choose a policy that meets your needs and fits your budget.