Car Insurance Rates Drop at Age 25 and Continue to Decrease

Once a young adult reaches 21 years of age, there aren’t many more milestones to look forward to until retirement age. Unless you count the dramatic decrease in auto insurance premiums that 25 year old drivers receive. Male drivers can expect savings of approximately 20%, while females will save about 12-15%.

Studies show that teenage drivers are the riskiest drivers on the road, seconded by senior-citizens over the age of seventy. For the most part, teenagers are inexperienced drivers who haven’t had hours of practice on the road. They haven’t been caught in a speed trap, been bumped at a stoplight, or had someone leave their turn-signal on and not make a turn. There is a certain amount of road-awareness that comes with being a seasoned driver.

Unfortunately, some young drivers believe they are invulnerable, taking unnecessary risks and driving recklessly, which endangers themselves and other innocent drivers. Of course not every teenager is a daredevil, but automobile accidents are the number one leading cause of death for people aged 16 to 24.

The number of reckless teen drivers is perhaps outnumbered by the safe and responsible teenagers on the road. However, even the careful teen drivers have a higher rate of simple fender benders and traffic violations, making them a liability to insurance companies.

For these reasons, reaching the age of twenty-five is seen as a milestone of stability to the insurance companies. Many people this age are either graduated from college or hold a secure job, some are married, and for the most part they have begun their adult lives and tasted responsibility.

So, how does one lower your rates, before reaching the age of 25?

• Buy only the coverage you need. If you have an older vehicle, you don’t necessarily want to pay for collision or comprehensive coverage. Take the bluebook value and add in your deductible and compare it to the premium. Chances are it will be cheaper to forgo the coverage and buy a replacement vehicle.
• If you are a parent, you can add the teenager to your policy which will not be as expensive as an individual policy. However, if you own an expensive car, it may be cheaper to purchase the teen an older, economical vehicle and go with the individual policy.
  Of course, don’t skimp on vital coverage just to save a buck. You don’t want to be paying large medical bills or lawsuit settlements until you are retirement age. Once again, the best advice is to simply drive safe, and have good coverage from a responsible company.