Insurance

How Age Affects Car Insurance Costs

Age is one of the main factors that insurance companies take into account when quoting car insurance. For a car insurance company, the driver’s age measures their driving experience and accident risk.

average auto insurance by seniority

Younger and older drivers pay significantly more than middle-aged drivers, according to an analysis by valuepenguin. rates drop sharply between ages 16 and 25 and then rise again after age 60.

Reading: What makes car insurance cheaper for young drivers

here are the average car insurance costs by age:

Costs continue to decline overall with each birthday. once drivers turn 50, they’ll see their best rates. However, around the age of 60, auto insurance costs begin to rise and compare to what drivers see in their 40s.

the cheapest insurance companies for young drivers

As a young driver, choosing the right insurance company can mean big savings. the difference between companies can be more than $10,000 per year.

Which insurer is the best option can change every year, so we recommend that you get multiple quotes each time your policy is renewed.

cheapest car insurance for 16 year olds

farm bureau has the lowest rates we found for 16 year old drivers, averaging $3,003 per year. that’s a bit cheaper than erie ($3111) and usaa ($3935).

erie is only available in 12 states, but it also offers multiple discounts for young drivers. farm bureau has a young driver safety program, but coverage options may vary depending on the state you are in.

cheapest car insurance for 17 year olds

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farm bureau also offers the lowest rates for drivers age 17+, followed by erie, usaa and state farm. the farm agency fee of $2,660 per year is less than half the overall average, a savings of more than $3,000 per year.

cheapest car insurance for 18 year olds

farm bureau, erie and usaa offer the lowest rates for drivers 18 years of age. Those three companies have average rates that are 47% cheaper than the overall average for drivers that age.

usaa and erie are not available to most drivers, and farm bureau options may change depending on where you live. If you’re looking for the security of a national insurer, Travelers offers a lower-than-average rate of $3,219 per year, with accident forgiveness options and various discounts for young drivers.

how gender affects auto insurance rates

Gender also plays a big role in car insurance costs. over their lifetime, men will pay about 9% more than women, although the price difference varies by age.

why do young and old drivers pay more for car insurance?

according to the insurance institute for road safety:

so, since your insurer thinks you’re more likely to crash when you’re young, your rates will be expensive. Experienced drivers in their 30s and 50s have higher driving skills and road maturity, which generally means lower accident rates.

However, once drivers reach their 60s, the trend begins to slowly reverse as age and slower reflexes begin to affect driving. Insurers typically start charging seniors more significantly once they hit their 70s. an 80-year-old driver ends up paying a little more than a 25-year-old.

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how to save money on car insurance as a young or older driver

shopping

shopping around is the most effective way to save money when it comes to insurance costs.

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We recommend that you obtain quotes from at least three companies. Most major insurers allow you to start a quote online, making it easy to compare prices.

discounts

Discounts are an easy way for drivers young and old to save money on their premiums.

For senior discounts, companies like allstate offer a “55 and Retired” discount where retired drivers over the age of 55 will automatically qualify for a 10% discount. Some companies also allow drivers over the age of 55 to take defensive driving courses to qualify for discounts.

join your parent’s policy

That’s because your parents are taking on some of your risk as a young driver, so insurance companies feel more comfortable offering a lower price.

Be careful, though, as your parents’ rate will increase significantly. if they’re still willing to add it, it’s a sure way to get a lower rate.

methodology and sources

To find the rates for each age group, we looked at two sample drivers:

valuepenguin collected hundreds of thousands of quotes from every zip code in illinois, pennsylvania, texas, and georgia.

Rate data was collected using Quadrant Information Services. your quotes will differ as rates should be used for comparison purposes only. rates are publicly obtained from insurer filings.

Statistics on teen accidents come from the Insurance Institute for Highway Safety.

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