Let's examine some common ways to decrease your car insurance rates, including aging, keeping a clean driving record, and switching insurance companies.
Car insurance costs typically go down for the following reasons:
The most substantial reductions in auto insurance rates typically come as teen drivers get older, usually when they hit 18 or 19 years old. Rates continue to decline as you age, particularly once drivers pass the age of 25. Car insurance rates tend to be lowest for drivers in their 50s, averaging $703 for a six-month policy.
Drivers with accidents or other violations on their driving records usually see higher rates for a period of three years, though this may vary by how your state handles certain violations. Many drivers may also see decreases after switching to a new company. Read on for details on common reasons your auto insurance rates might drop.
If you’re a young driver, you can look forward to car insurance savings as you get older. Both male and female drivers see the biggest drop in average annual car insurance premiums between the ages of 18 and 19. This is because younger drivers are seen by most insurance companies as riskier to insure due to their overall inexperience behind the wheel. On average, you can expect savings of $1,595 per year when you turn 19.
GEICO, American Family and USAA are the cheapest insurance companies for teen drivers according to our data. While this can change depending on where you live and your own individual driver profile, these three companies tend to provide the lowest rates on average. See the list below to find out more about rates for teenagers as well as information on available discounts.
A six-month GEICO policy averages $1,553 for teen drivers on a parent's policy, coming in quite a bit cheaper than most other carriers. GEICO also offers features that can help more inexperienced drivers find better rates, including discounts for being a good student and for participating in driver safety and driver training programs.
For teen drivers on a parent's policy, USAA premiums average $1,666 for a six-month policy. USAA, however, has strict eligibility guidelines, meaning that all drivers must either be in the military or be in a military family in order to qualify. Those who are eligible, however, can take advantage of further savings, including good student discounts and savings for being in a driver training course or USAA's SafePilot program.
Drivers adding a teen to their policy can expect to pay around $1,600 for a 6-month policy with American Family Insurance. While not as widely available as many of its major competitors, American Family nonetheless provides affordable rates for those with a teen driver on their policy. Discount options geared toward younger drivers include the good student discount, a discount for being a young volunteer and for enrollment in the TeenSafeDriver program.
Have a look at the following rates below to get a sense of what drivers in this age group are likely to pay in premiums for their own insurance policy.
Average Annual Premium by Age (teens on their own policy)
|Age||Average Annual Premium||Difference From Previous Year|
Car insurance rates decrease with age because insurers see less risk in covering older, more experienced drivers. While it's unlikely your driving skills will magically improve on your birthday each year, data show older drivers are less likely to file insurance claims as they age. Young drivers would do better to stay on their parents' insurance policy during their teenage years if possible, as rates can be dramatically lower. Furthermore, there may be insurance discounts they can seek out. For instance, many auto insurance companies offer telematics programs that reward safe drivers. Similarly, good student discounts can be another way to lower a teen driver's car insurance rates. It's also a good idea for new drivers to drive older vehicles, as new cars are often more expensive to insure.
Check out the cheapest car insurance companies for a 25-year-old driver:
Nationwide is the cheapest insurer for 25-year-olds according to our data, offering an average rate of $612 for a six-month policy. The company also has a number of saving options that could be worth looking into, including discounts for safe driving, affinity memberships, and completing driver safety programs. You may also want to consider their telematics and low-mileage driver programs, SmartRide and SmartMiles, which factor in your driving habits to offer a potentially lower rate.
GEICO is known as one of the more affordable companies for car insurance and this holds true for 25-year-olds who pay an average of $636 for a 6-month policy. Drivers should definitely inquire about potential discounts, as the company offers many that can help make rates more affordable. Discounts may be vehicle specific (air bags, anti-lock brakes, anti-theft systems) or based on your driving profile (good student, safe driver, driver education).
25-year-old drivers can expect to pay around $685 for a six-month policy with Progressive. The company has offers drivers many ways to save, including discounts for loyalty, safe driving, and paying your premiums in full. Also worth checking out is Progressive's Snapshot program which monitors your driving activity to provide a more accurate rate.
Learn more about how your age and driving experience affects your car insurance rate by checking out our breakdowns by age.
Most tickets, claims, and citations will stay on your insurance record for three years. However, this can depend on the severity of the infraction as well as what state you live in. Below are common citations and their projected three-year impacts on car insurance premiums, along with the accompanying insurer-specific estimates. Bear in mind these figures are estimates, dependent on state- and insurance company-specific regulations.
|Year||Average annual premium||Average annual increase|
|Company||Average premium after ticket||Total cost over three years|
|Year||Average Annual Premium||Average Annual Increase|
|Company||Average premium after DUI||Total cost over three years|
|Year||Average Annual Premium||Average Annual Increase|
|Company||Average premium after accident||Total cost over three years|
There are some serious ramifications for receiving a ticket, DUI conviction, or causing an at-fault accident — especially considering the total cost of increased premiums over three years. Serious infractions like a DUI can make a significant dent in both your finances and even put your car insurance policy at risk of cancellation.
If your driving history is riddled with such offenses, you may benefit from finding a non-standard insurance policy. Non-standard carriers typically offer less expensive, no-frills auto insurance coverage that puts less weight on factors such as your driving record or your credit score. However, many of these companies suffer from less than stellar customer service, which can be problematic if you need to file a claim.
Similar to the effects of celebrating a birthday or having a violation fall off your insurance record, moving from company to company is another way to lower your auto insurance rates. You may find that some car insurance companies might charge higher premiums — regardless of the policy type — simply because you don't fit their ideal driving profile. This is because each insurer uses different rating factors when putting together an auto insurance policy. Non-standard companies, for instance, may be more forgiving than larger companies.
As your circumstances change — via aging, time passing since your last traffic violation or car accident, or relocation to another zip code — so too will your insurance rates. Shopping around with a number of insurance providers is strongly encouraged, as rates can vary widely from one company to another. When shopping for a new car insurance policy, make sure to inquire about ways to save, including bundling homeowners coverage with your car insurance. In general, assessing car insurance quotes from various companies every six months is a great way to find cheaper rates. Enter your ZIP below to get started!