When Does Car Insurance Cost Go Down?

Basic Tips and Facts to Get a Lower Insurance Price

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A common question—when buying or renewing a car insurance policy—is, “When does the price of car insurance go down?” Sometimes it seems like the cost is always going up for no good reason, especially if your car keeps getting older. However, the age of your car isn’t the only determining factor when price is set. A few things can help you know when the cost of your car insurance will go down, and how to get the best price instead of waiting.

What Makes Car Insurance Cost Go Up or Down?

Some very basic things will determine if your car insurance goes down. For example:

  • Your age
  • Your driving experience and claims record
  • Your credit score
  • Your address, occupation, or usage of the car
  • Your choice of insurance company

Here are commonly asked questions with examples of how each of these factors impacts your insurance price, and when you can expect to get car insurance discounts or get a lower rate on car insurance as a result.

At What Age Does Car Insurance Go Down in Price?

Depending on your age, you may see your car insurance rates go down at various times. Seeing your car insurance go down with age works in a few different ways:

  • Young drivers: As you gain more driving experience, you may see your rate go down for every year that goes by without a claim. An 18-year-old with no driving experience and no driver's education may end up paying more than a 16-year-old who took driver's ed and gets a young driver discount because of that. The cost of insurance for young drivers can go down every year until about age 25, if all else remains the same. Young drivers can also benefit from good student discounts. 
  • Adults: You may still see your car insurance go down with age after 25 if your insurance company offers age discounts. These age discounts or preferred rates may be greater with insurance companies targeting people in your age group. Some insurance companies will give age discounts starting at 35-40 years old and may continue to adjust rates all the way up to retirement. It all depends on who the insurance company sees as their “target client”.
  • Seniors: Many insurance companies offer discounts to seniors, or may even offer discounts if you are part of a senior group. Retiree discounts are also common.

Always check the pricing with a few insurance companies, regardless of your age group, to see if they will offer you better rates.

Some insurance companies give young drivers the best car insurance rate, and others are best for seniors. Even if you have to pay a penalty for switching your insurance company, it may be worth it if you are going to get a lower price.

How Long Does It Take Price to Go Down With Claims?

Having one responsible claim can impact your car insurance policy for at least 3 years. Having multiple claims is even worse because it may put you in a high-risk driver category. For each year you do not have a claim, you come closer to benefiting from a claims-free discount, good driver discount, or preferred rates.

To help your insurance price go down when you’ve had a claim, consider:

  • Leveraging your insurance by combining your home and car insurance to get another discount
  • Take a higher deductible to save money (because making small claims is probably the last thing you will want to do if you are trying to clean up your claims record)
  • Consider getting a usage-based insurance discount

What About Starting a Career or Getting Married?

Age is a major factor in the price of car insurance because so many other things go hand-in-hand with age. As you get older, you may start a career, or a family (or both). This implies more responsible behavior. You may move into a safer neighborhood, which can save you money on insurance.

Some insurance companies will reduce the cost of your insurance or give a discount when you are married or have a family.

Some will offer a discount if you are a college graduate, member of a professional order, or are a professional. You may also save money on your insurance if your employer offers group insurance.

You don’t have to stay with the same insurance company to wait for your car insurance to go down. Companies change from year to year, so you should always ask questions and shop for the best company for you.

Does Car Insurance Go Down With a Good Credit Score?

Your car insurance price can go down drastically if your credit score improves. Ask your broker or agent if your insurance policy uses a credit score. You can save a lot of money using a good credit score for insurance.

If you have a bad credit score, shop around to see if there is an insurance company that is not using credit scoring in their ratings. If you are repairing or rebuilding credit, a company not using the score may actually save you money.

Will Usage-Based Plans Make Car Insurance Go Down?

Usage-based insurance is a fast way for newer drivers, younger drivers, or any driver who is a safe driver to reduce the cost of their car insurance. By using a device that tracks your driving habits, you may save significant amounts of money after a short period of time. Ask your broker or agent about usage-based insurance discounts.

How Do I Find an Insurance Company with Lower Prices?

Some things that will make your car insurance cost go down are not within your control. But others are. For example, on a year when an insurance company has more claims paid, your insurance rates may go up. These things are not in your individual control, except that you may be able to find an insurance company that has better rates, even when others have higher ones. You should also look into state programs that may be able to help if you're in need of low-income car insurance. Find a good deal by shopping around and checking which car insurance company is the best for your circumstance.

Article Sources

  1. Insurance Information Institute. "What Determines the Price of an Auto Insurance Policy?" Accessed March 5, 2020.

  2. Insurance Information Institute. "Auto Insurance for Teen Drivers." Accessed March 5, 2020.

  3. Insurance Information Institute. "Senior Driving Safety and Insurance Tips." Accessed March 5, 2020.

  4. Insurance Information Institute. "Nine Ways to Lower Your Auto Insurance Costs." Accessed March 5, 2020.

  5. Insurance Information Institute. "Do Auto Insurance Premiums Go Up After a Claim?" Accessed March 5, 2020.

  6. Insurance Information Institute. "Credit and Insurance Scores." Accessed March 5, 2020.