A to Z Insurances

How Does Age Affect Car Insurance Premiums

Last Updated on December 21, 2023 by a2z_admin

When it comes to car insurance, the amount you pay can be influenced by your age. Let’s break it down in a way that’s easy to understand.

Teen Drivers: If you’re 16 years old, you might be paying around $613 per month for full coverage car insurance. That’s quite a bit – about three times more than what a 25-year-old driver pays for the same coverage.

 Middle-Aged Drivers: Good news! Once you hit 60, the rates start going down. A 60-year-old driver pays an average of $158 per month for full coverage insurance. However, keep in mind that after 60, the rates start to rise again.

How Men and Women Differ: Men generally pay more for car insurance than women. This difference is more noticeable for younger drivers. On average, men pay about 6% more than women for full coverage. For guys between 16 and 20, it can be even higher – 9% to 11% more expensive.

Changes as You Gain Experience: The good news is, as you gain more experience, your rates tend to go down. For example, a 19-year-old driver pays 24% less for full coverage insurance than an 18-year-old. And between ages 20 and 21, rates drop by 17%.

Overall Outlook: Young drivers, don’t worry too much. Your car insurance rates become much more affordable as you approach 25. At that age, you can expect a noticeable decrease in what you pay.

Here’s a quick look at how rates change with age:

AgeFemaleMale
16$586$640
17$515$568
18$457$505
19$346$383
20$312$345
21$263$285
22$245$261
23$230$244
24$218$228
25$197$202
30$179$178
35$176$174
40$174$172
45$172$170
55$165$165
60$158$159
65$161$163
70$170$173
75$185$191
80$203$215
85$220$233

Remember, these are just averages, and individual rates may vary. As you grow older and gain more experience behind the wheel, the cost of car insurance tends to become more manageable.

Why do younger drivers have higher car insurance rates?

When it comes to car insurance, younger drivers usually end up paying more. This is because teens have less experience behind the wheel, which makes them more likely to get into accidents compared to older drivers.

According to the Insurance Institute for Highway Safety:

  • Drivers between 16 and 19 years old are four times more likely to be in a car accident compared to older drivers.
  • Even though drivers aged 15 to 20 make up only 4% of all drivers, they were responsible for 7% of all fatal accidents.

Because insurance companies believe that younger drivers are more prone to accidents, they charge higher rates. On the flip side, drivers in their mid-30s to late-50s tend to have more experience and road maturity, resulting in fewer accidents. That’s why insurance rates are usually lower for this age group.

As drivers reach their 60s, rates start to slowly go up. This is because age and slower reflexes can begin to affect driving. An 80-year-old driver, for example, might pay around $209 per month for full coverage, which is just $10 more per month than a 25-year-old.

How Your Gender Impacts Car Insurance Rates as You Grow Older?

Your gender can influence how much you pay for car insurance as you get older. On average, guys end up shelling out about 6% more money than girls throughout their lives. However, it’s important to note that this difference in cost changes depending on how old you are.

When you’re younger, like under 21, guys usually end up paying about 10% more than girls for full coverage insurance. As you grow older, this difference starts to shrink. Once you hit 30, guys start paying around 1% less than girls, and this trend continues until you reach the age of 50.

How to Save Money on Car Insurance at Any Age?

Saving money on car insurance is important for both young and older drivers. Here are some simple steps you can take to cut down on your car insurance costs:

  • Compare Prices: The best way to save money is by checking out different insurance companies. Get quotes from at least three companies to see which one offers the best rates. Most big insurance companies let you start a quote online, making it easy to compare prices quickly.
  • Look for Discounts: Discounts are like special deals that can help you save money on your car insurance. For example:
    • If you’re a teen, keeping good grades and taking defensive driving courses can save you up to 10% on your car insurance.
    • If you’re a senior driver (55 and older), companies like Allstate offer a “55 and Retired” discount, automatically giving you a 10% discount. Some companies even let drivers over 55 take defensive driving courses for additional discounts.
  • Join Your Parents’ Policy: If you’re 18 years old, it’s much cheaper to join your parents’ car insurance policy than to get your own. Even though your parents’ rate might go up a bit, the overall cost is still much lower than having separate policies. If your parents are okay with it, sharing a policy is a smart way to get a lower rate.

By following these steps, you can make sure you’re not paying more for car insurance than you need to, whether you’re a teen or a senior driver.

Cheapest insurance companies for young drivers

If you’re a young driver looking for insurance, Travelers stands out as the most budget-friendly option for folks under 25. On average, they charge around $273 per month for full coverage.

Comparing this to other popular insurance companies, Travelers is 6% cheaper than Geico and 9% cheaper than State Farm. This decision can make a big difference, with potential savings exceeding $300 per month when you choose the right insurance company.

Here’s a breakdown of the monthly rates from various companies:

  • Travelers: $273
  • Geico: $290
  • State Farm: $299
  • Progressive: $391
  • Nationwide: $422
  • Farmers: $516
  • Allstate: $526
  • USAA: $217 (Note: USAA rates are lower, but eligibility criteria apply)

If you’re a new driver, you might find lower-priced insurance from smaller companies like Erie, Farm Bureau, and Auto-Owners.

For instance, Erie offers full coverage at $191 per month, but it’s only an option in 12 states and Washington, D.C.

The right choice may vary each year, so it’s a good idea to compare quotes from a few different companies when your insurance policy is up for renewal.

Best Affordable Car Insurance for Older Drivers

If you’re a senior driver looking for the most budget-friendly car insurance, consider checking out State Farm, Travelers, and USAA. These three companies offer rates that are lower than the average for drivers aged 65 and above.

Here’s a quick breakdown of the monthly rates from these companies:

  • State Farm:   $162
  • Travelers: $172
  • USAA: $137
  • Geico: $183
  • Progressive: $189
  • Nationwide: $198
  • Farmers: $275
  • Allstate: $282

It’s important to note that these rates are below the average for senior drivers. Other companies, such as Geico, Progressive, Nationwide, Farmers, and Allstate, also provide insurance options, but their rates are somewhat higher.

Additionally, you might want to explore quotes from smaller regional companies like Farm Bureau, Erie, Auto-Owners, and Country Financial if they operate in your area. These companies can sometimes offer competitive rates.

For seniors seeking full coverage, Farm Bureau stands out with an average monthly rate of $118. However, keep in mind that Farm Bureau’s offerings may vary based on your location, and you may need to pay a membership fee to secure a policy.

To find the best and most affordable car insurance for seniors, it’s recommended to compare quotes from different companies, taking into account factors like coverage options, location, and any additional fees associated with policies.

FAQs

Young drivers under 25 usually pay higher car insurance rates because they haven’t been driving for very long. Since they’re still learning the ropes, they might make mistakes while driving that could lead to accidents.

Car insurance rates are lowest for drivers who are around 60 years old. This is because these drivers have a ton of experience on the road. People between 30 and 65 also get pretty reasonable rates. However, once you hit 60, the rates might start going up because older drivers might not react as quickly, affecting their driving.

On average, guys end up paying about 6% more for full coverage car insurance than girls throughout their lives. The biggest difference is when you’re under 21, with guys paying around 10% more than girls.

Young drivers pay more for car insurance because they haven’t been driving for long, and they’re considered more likely to take risks. Insurance companies think that this makes them more prone to causing accidents, which bumps up the cost of insurance.

Your age can also tie into other things that make car insurance pricier. For instance, young drivers are more likely to rent an apartment, park on the street, or have a lower credit score compared to older drivers.


a2z_admin

Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.