Have you ever noticed how the younger someone is, the more they pay for car insurance? Have you ever wondered why? Knowing the age that insurance goes down is important when planning your automotive future. When shopping for car insurance, many factors affect how much you will pay in premiums. And some of these factors include things entirely out of your control, like your age. This is why many young drivers struggle to find affordable car insurance and end up wondering when insurance gets cheaper.
Luckily, it won’t be that way for long. Let’s find out at what age you should expect to see a discount on your insurance.
What Age Does Car Insurance Go Down: Frequently Asked Questions
At what age does car insurance go down?
Car insurance generally decreases every year.
As young drivers are associated with higher claims costs, insurance companies charge significantly more for their auto insurance premiums between the ages of 16 and 25. At 16, you have just received your license and are brand new to driving. Teen drivers are at the highest risk of being in an accident because they are still learning, and insurance companies know this, which increases the cost of insuring a vehicle. However, with each renewal, you should see your insurance decrease as you gain more experience behind the wheel. The most noticeable decreases for young drivers usually drop at 19, 21, and 25 years of age.
If the vehicle, driver records, company rates, and other rating factors remain equal then it is true that the older you are, the lower your auto insurance rates. When you turn 25 you are generally not in the younger drivers group and will see a decrease in car insurance costs due to less However, some seniors may see an increase in their car insurance premiums as they age because, statistically, they are more likely to be involved in an accident.
With these in mind, drivers can typically expect to see a decrease in their annual premiums at each renewal period.
What else can affect your premiums?
The fact of the matter is that there are several factors considered when determining the cost of your car insurance premiums, and its important to understand them when getting your car insurance quotes. In addition to your age, here are other factors that insurance companies will consider:
● Your driving history and experience. The more experience you have, the less likely you are to be in an accident. It’s that simple. However, if you have a bad driving record, it may be a while before you see a decrease in your premiums.W
● Your driving habits. If you use your car daily to get to and from work, your rates will be higher than those who only drive it for leisure. The more time you spend in your car, the higher your rates will be.
● Your location. Living in a densely populated area like metropolitan Toronto puts you at a higher risk of being in an accident. If you live in an area with higher crime rates, you are at an increased risk of theft or vandalism
.● Your vehicle’s age, make and model. There are a number of reasons why what vehicle you drive affects your insurance premiums. Statistically, certain vehicles:
- Have better safety ratings than others
- Are more prone to theft
- Are more likely to be involved in an accident
- Cost more to repair
● Your insurance provider. Some insurance companies will offer discounts to loyal customers or clients who bundle their car insurance with other insurance policies.
● Your gender. You may not think that a person’s gender could affect their premium, but it does. Male drivers pay more for their premiums than female drivers.
● Your license. Drivers with a G1 or G2 will have higher insurance rates than someone fully licensed.
There are a few other factors out of your control that influence your premiums, just like your age. For example, when there is an increase in insurance fraud or nearby vehicle thefts, insurance companies are more likely to increase premiums in order to balance risk. Another factor out of your control is when there is an increase in insurance claims. On the other hand, when there is a decrease in these risks, insurance companies are more likely to lower their insurance rates.
Does gender affect how much your insurance costs go down?
It sure does. Statistically, men are more likely to be involved in an accident than women. On average, men drive more often than women, own more expensive cars and engage in riskier driving behaviours, such as speeding or not wearing a seatbelt. Men are also more likely to receive a DUI.
As such, insurance companies generally see women as less of a risk behind the wheel and charge lower premiums. This is more noticeable before the age of 25. After that, women still often pay less, but the difference in amount isn’t as significant.
What other factors make your car insurance premiums go down?
- Your driving history. Did you know that a ticket stays on your record for three years? Or that an accident remains for six? If you have either of these on your record, your premiums will start decreasing once they are cleared.
- Your marital status. Married drivers are often more experienced, statistically older and more likely to have children in their car, motivating them to drive more safely. Also, married drivers are more likely to receive multi-car discounts by putting both vehicles under one policy.
- Your job. Some employers may offer a group discount program through partnerships with specific insurance companies. It may be worth it to inquire with your employer if you believe it could provide a group discount to your policy.
- Your car’s storage. If you have a private garage, your insurance will be lower than someone who parks on the street. This is because vehicles parked inside a private garage are less likely to be vandalized or stolen.
How much does car insurance go down each year?
As previously mentioned, there are several factors insurance companies consider in determining how much your rate will drop (or go up) at each renewal. Young drivers could see their rates drop by up to 50% by the time they reach the age of 25. After that, with a clean driving record, your insurance should continue to decrease at each renewal as long as the insurance company doesn’t have an overall price increase due to factors outside your control.
How else can I reduce my car insurance rates?
Every insurance company has their own list of available discounts to help you lower your premiums. Here are some you can inquire about if they apply to you:
- Compare quotes. Different insurance companies will offer you different rates, so it’s best to shop around to ensure you’re getting the lowest price possible.
- Telematics apps. These apps monitor your driving behaviours, allowing insurance companies to use this data as part of your risk assessment.
- Drive cheaper, low-tech vehicles. If your vehicle isn’t worth much, it makes it cheaper to replace. It also might not be worth paying for collision or comprehensive insurance if it’s only worth a few thousand.
- Increase your deductible. If you have an excellent driving record, ask your insurance provider about increasing your deductible to help lower your premiums.
- Insure all vehicles under one policy. Insurance companies offer discounts when bundling your cars. If you and your partner both have vehicles, bundle them together so you can both save.
- Bundle your home and auto insurance. If you bundle, we can reduce your car insurance by up to 18% and up to 50% off on your home policy, depending on your quote