Many drivers believe that their car insurance premiums suddenly drop when they turn 25.
New data from CarInsurance.com shows the reality is much more dramatic and starts much earlier.
A recent analysis of average auto insurance premiums by age found that 18-year-old drivers pay an average of $7,498 per year for full coverage, compared to $3,044 for 25-year-old drivers. That’s a difference of $4,454 per year.
Some notable discoveries:
An 18-year-old pays an average of $7,498 per year. Teenage drivers pay more than four times as much as experienced middle-aged drivers.
Once you turn 25, your average premium drops to $3,044.
Typically, drivers’ insurance premiums are lowest between the ages of 30 and 60.
Rates continue to decline until around age 60, when a driver’s average premiums are at their lowest.
Teen drivers will face the highest insurance premiums. For example, a 16-year-old pays an average of $10,387 per year to be fully insured, more than three times as much as an adult driver.
Gender also primarily influences the proportion of people in their 20s. Young men earn more, but the difference decreases by age 40 as drivers gain more experience.
Rates rise again once you’re over 70, but you can offset age-related premium increases by choosing a preventive driving course or a pay-per-mile policy.
The findings highlight the importance insurers place on driving experience and risk, especially for young drivers just starting out on the road.
