Paying too much for auto insurance as a 25-year-old driver? Check out our tips on how to save.
The average car insurance rate for a 25-year-old driver is $1,770 per year — or about $885 for a standard six-month policy. While 25-year-old drivers do pay more than the national average, their premiums decrease by nearly $300 per year just by virtue of turning 25 and no longer being designated as "young drivers." Since saving money on car insurance is important at any age, let’s explore some ways to save on car insurance premiums at the age of 25.
In order to find the cheapest car insurance policy, we created a user profile (outlined here) and gathered premiums from some of America's most popular companies. Based on our research, USAA and GEICO provided the most affordable auto insurance rates for 25-year-olds.
| Insurance Provider | Average 6-month Premium |
|---|---|
| Allstate | $1,117 |
| Farmers | $919 |
| GEICO | $680 |
| Liberty Mutual | $888 |
| Nationwide | $794 |
| Progressive | $885 |
| State Farm | $726 |
| USAA | $605 |
USAA offers the cheapest rates at $1,210 annually, $605 per six-month term, just over $100 per month for a 25-year-old driver. Those ineligible for USAA's armed forces-focused coverage should consider GEICO, which charges around $13 more per month for similar coverage.
Now that we've covered how your age impacts your premium, which vehicles are the cheapest to buy and insure, let's breakdown some quick ways to lower your premium.
Accidents happen — but that doesn't mean you need to file a claim. Depending on the value of damage, you can pay more in increased insurance premiums than the out of pocket damage. For example, you live in Texas and damaged your vehicle while backing out of your driveway — no other vehicles involved. The out of pocket expenses are $1,400.
In 2018 in Texas, the average collision claim increased rates $801 per year. Because most insurance companies will increase your rates for three years after an accident (at minimum), you can expect that $801 to equate to $2,403 total. If you have a $500 deductible, the total expense of the accident is $2,903. If you had paid for the damage yourself, you could have saved $1,503.
If you're unsure whether or not to file a claim, or just want more information, see here.
If your vehicle is 10 years or older or worth less than $4,000, consider dropping your collision coverage. This coverage is designed to protect the physical integrity of your vehicle, but if it isn't worth much you could be paying for coverage you do not need. You can determine the value of your vehicle by using Kelley Blue Book. If it's determined you do not need your collision coverage, considering keeping your uninsured/underinsured motorist coverage. This will cover any property damage done to your vehicle after an accident with an uninsured driver — for example a hit and run. Furthermore, you should also keep your comprehensive coverage to prevent weather, animal, and theft-related damage to your vehicle.
If you own a home or are renting, you can save money on your auto insurance by bundling your policies.
Many discounts will be automatically added to your policy based on the VIN of your vehicle or your driving history. However, there are some you need to look or apply for in order to qualify. Below are some highlights.
Telematics, or usage-based insurance providers, use the way you drive in order to determine your premium. Here, your driving habits can earn you a discount on your premium. By avoiding harsh braking, high acceleration speeds, and late-night drives, you can save on your auto insurance policy. Below are the advertised savings by insurance company.
Learn more about usage-based insurance.
Below you'll find some of the most commonly asked questions about car insurance for 25-year-olds.
In general, safe drivers can expect their car insurance rates to drop go down at 25, as much as $300 per year in some cases. However, turning 25 is not as significant to insurers as moving into your 20s from your teenage years. Teen drivers will almost always face higher premiums due to their inexperience. Essentially, while moving up into your late 20s is generally viewed positively by your insurance company, 25-year-old drivers with a long claims history or a poor driving record may not see lower rates at all. To find the best rates, it pays to keep a clean driving record, a good credit score, and keep traffic violations to a minimum.
In general, most drivers find that their insurance rates will continue to steadily decrease as they get older. As drivers get closer to 30, the rates become more affordable, with the average yearly car insurance premium for a 30-year-old in the U.S. coming in at $1,552. That's a savings of $218, or $109 for a 6-month policy. Rates tend to continue to become lower for certain age groups, particularly those in their 40s and 50s where rates become lowest. In short, along with car insurance discounts and the methods of saving outlined above, one of the best ways to save on car insurance is to simply keep getting older.
The cost of car insurance usually decreases after 25 for a number of reasons. Driving experience is a major factor, as more experienced drivers tend to be safer and file fewer claims. As drivers move into full-fledged adulthood, other factors can come into play as well, including your credit score, the type of car that you drive, and even your marital status. These can all have a positive impact on your auto insurance rates.
The absolute best thing you can do is shop around. Although your rate does decrease after you turn 25, only one company will offer you the lowest rate. Enter your information below to see comparison quotes from local and national insurance companies based on your driving record, vehicle, and age.
If you're looking for more ways to save money on car insurance, see our articles:
Each article is thoroughly researched to ensure we provide readers the most accurate — and helpful! — information possible. That’s insurance in black and white.®
