Does Your Car Insurance Go Down When You Turn 25?

If you’re a young driver or have a young driver on your policy, you might be counting down the days until that 25th birthday — when you’ve heard your insurance premium will drop. But is there an insurance discount available shortly after a driver turns 25?

There’s a reason for this common belief. Younger drivers are a higher risk for insurance companies. They tend to be newer drivers and, according to the National Highway Traffic Safety Administration (NHTSA), they’re more likely to be involved in car crashes than other age groups. Therefore younger drivers, particularly teens, are charged higher premiums.

But we often hear drivers who are 25-30 wondering why they’re not seeing premium decreases. The truth is, while your premium could decrease after 25 — it’s not a guarantee.

Why doesn’t your car insurance premium decrease when you turn 25?

Well, nothing about turning 25 magically makes you a better driver. While insurance companies use statistical data to determine what age ranges are most likely to be in a car crash, they also use your driving habits to determine your rate. That means any prior claims or tickets could be significantly more impactful than crossing into a new age bracket. U.S. drivers are also taking longer to become licensed.

According to the Federal Highway Administration, only 25.6% of 16-year-olds were licensed in 2018, compared to 46.2% in 1983. If you’re turning 25 but only have 1-2 years of experience, you’re less likely to see a drop in your premium.

Finally, age is just one factor that insurance companies use to calculate rates. Driving history, location, the car you’re driving, and how much insurance you buy can influence your rates significantly — so can some unexpected factors. If you’re celebrating your 25th birthday with a brand-new car or moving to a zip code with more auto theft or crashes, these factors are more likely to offset potential savings.

Just because turning 25 doesn’t mean an automatic rate reduction, however, doesn’t mean you can’t improve your insurance. If you’ve been driving for a few years, your insurance premiums will likely decrease as you get more experienced. And if you’ve got a clean driving record, it’s a good idea to shop around if your rate isn’t going down, especially as your car ages or if you opt out of purchasing collision and comprehensive policies. If you’d rather skip the complexity of figuring out what insurance to buy, try Coverage Cat — we find you the best price and better coverage, with just one online form.