When Does Car Insurance Go Down?

Everyone wants cheaper car insurance. We’ve all seen enough GEICO commercials to know that. Car insurance rates fluctuate over time based on a range of factors. And though you have some control over the cost of your premium through the coverage you select and discounts you apply for, insurers have broad leeway to set and elevate your rates as they please.

How long it will take for your personal rate to go down depends on why it’s high in the first place. If you’re a young driver, it may just be a matter of time. If you’ve got a spotty driving record, it may take a little more time and a clean streak without tickets or accident-related claims for your car insurance to go down.

Does car insurance go down when you turn 25?

When you turn 25, there's a good chance you'll see your auto insurance costs go down. According to Progressive, rates for their policies drop by 8% on average at age 25. This is because more experienced drivers are less likely to have accident claims than inexperienced drivers, which generally means older drivers are less expensive to insure than younger drivers. In fact, data from Progressive shows that rates continue to drop over the course of one’s life, before picking back up again at age 75.

From the perspective of car insurance companies, 25 is the age at which you're considered an experienced driver. This is assuming you've had your license for quite a few years, that is. If you get your license at 24, your car insurer won't suddenly view you as being an experienced driver when you turn 25.

More than just your age group is taken into account when determining car insurance rates. For instance, if you get into an accident or purchase a more expensive car right before you turn 25, you might not see your car insurance rates go down. So simply turning 25 doesn't guarantee your rates go down — but it can help.

How long does it take for car insurance to go down after an accident?

If you've been in an at-fault accident and file a claim with your auto insurance company, you'll likely see an increase in your car insurance rates. You might even see a rate hike for an accident that wasn't your fault.

In general, these increases tend to stay on your insurance record for three to five years following your claim. If, however, you had a solid driving record prior to an at-fault accident, you might not see an increase at all. Many car insurance companies offer drivers the chance to earn or buy accident forgiveness.

The amount your rate will increase will vary from company to company, with certain types of accidents being considered worse than others. For instance, although your insurer might increase your rate for accidentally rear-ending someone, a drunk driving incident will probably result in a nonrenewal from most insurance companies. A nonrenewal is when your insurance company chooses not to renew your policy when it expires.

How long does it take for car insurance to go down after a ticket?

You might see higher rates on your car insurance if you receive a ticket for a traffic violation. The increase in your rate will vary from company to company and will likely depend on the severity of the ticket. For instance, although a DUI will likely result in your insurer deciding to not renew your policy, a speeding ticket might just result in a higher premium. It really depends on how your state and insurer treat the particular moving violation.

A speeding ticket will generally come off your record after three years, though may stay on as long as five depending on how long your state tracks violations. In some states, you may be able to remove the traffic violation from your driving record even sooner by attending traffic school.

Does car insurance go down if you improve your credit score?

Your insurance score is similar to your credit score in that it's determined using the information in your credit report. Insurance companies look at information from your credit history, such as your payment history, credit use, new applications for credit, and outstanding debt, and they apply a weighted score to each factor.

This scoring system gives insurers an idea of how well you manage your money. According to the Insurance Information Institute, "[A]ctuarial studies show that how a person manages his or her financial affairs is a good predictor of insurance claims." Those with a high insurance score are generally less likely to file a claim. So you could see your rates go down if you've been working on raising your credit score.

If you're working to establish credit or to rebuild your credit, a good thing you can do to help lower your car insurance rates is to continue practicing proper money management.

How to save on your car insurance

Many factors go into determining the cost of a car insurance policy — from the type of car you drive and the coverage you choose to your driving record and even where you park your car.

If you really want to save money on car insurance, your best bet is to comparison shop. Although you might not be able to escape certain factors that keep your rates up, such as an accident, traffic violation, or your age, car insurance policies vary in price from company to company, and insurers have an incentive to draw in new customers with competitive discounts.

Comparing auto insurance quotes from a variety of insurers allows you to make sure you're getting the best price for the coverage you need. If you’re a younger driver (or the parent of a younger driver) contending with high age-related rates, consider looking for an insurer that offers insurance discounts for students.

If you’ve got a spotty driving record that’s keeping your rates up, some insurers have shown themselves to be more lenient than others. For example, in our analysis of the best cheap car insurance companies, we found that Progressive could be a good choice for drivers with a DUI due to the company’s cap on DUI-related rate hikes.

Bottom line

Whether you’re fresh off an accident or simply new to the road, high insurance premiums are a real pain. The good news is, if you keep a clean driving record, your rates should eventually go down. Most low-level traffic violations come off your record after three to five years, and if you’re under 25, there’s a light at the end of the tunnel, all you have to do is wait.

If you don’t feel like waiting, consider comparing your policy to those offered by the best car insurance companies to see if you can get a lower rate now.