Here’s When Your Car Insurance Rates Start to Go Down

There are many factors that go into determining your car insurance rates. Here’s when car insurance typically goes down, as well as what you can do to help your rates decrease.

Here’s When Your Car Insurance Rates Start to Go Down
Updated May 13, 2024
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Everyone wants to know how to save money on car insurance. And it’s often possible to do quite easily. You can comparison shop online to find the best car insurance rates, and you can go through your policy to make sure you aren’t paying for insurance coverage you don’t need.

However, there are instances in which you need to get car insurance and the possibility for savings is out of your control. If you’re a new driver, you don’t have an established driving record that shows insurers you’re less of a risk. On the flip side, a history of auto accidents and tickets can cause your rates to go up.

If you’re a young driver or you’ve recently been in an accident or gotten a ticket, you’re probably wondering when your rates will go down. There are many factors at play, so let’s jump in and take a look at what you can expect and what actions you can take.

In this article

Why do car insurance rates go up or down?

Here’s how car insurance works: when you purchase car insurance, you’re purchasing a level of protection for you and your car, as well as other people and their property. If you damage your car or someone else’s property, or you injure or kill someone in an auto accident, your auto insurance will be there to alleviate the resulting costs.

You pay a car insurance premium in exchange for such protections, and you pay a car insurance deductible to help share some of the risks with your insurer. Deductibles are the amount you pay out of pocket toward a covered loss. Although you get to pick the amount of your deductibles, your insurer determines the premium you pay to receive coverage.

Many factors go into determining your 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. Although not all car insurance companies use the same parameters for determining the cost of your policy, here are some of the most common factors that impact the car insurance rates:

  • Your driving record: In the eyes of an insurer, you’re a risk. As a result, your driving history has a direct impact on the price you’ll pay to carry insurance. If you have a clean driving record, you’ll likely be considered a safe driver and benefit from lower rates. If you’ve been involved in accidents or ticketed for serious traffic violations, there’s a good chance you’ll pay more. If you’re a new driver without an established insurance track record, you’ll likely pay more for insurance as well because the insurance company has to assume you might make mistakes based on overall driving statistics.
  • How often you drive your car: Many car insurance companies lump drivers into two categories based on the use of their vehicle: pleasure use and commuter. If you rarely use your car, your chances of getting into an accident and filing a claim are low. On the other hand, the more miles you drive, the greater the likelihood of an accident. If your chances of getting into an accident are higher, you’ll pay more and vice versa.
  • Where you’re located: You probably won’t pay as much for car insurance if you live in a small town or rural area as you would if you live in an urban area. Incidents like vandalism and theft tend to occur more often in cities, which can lead to you paying higher auto insurance rates.
  • Your age: People with less driving experience, particularly newly licensed teen drivers, are at greater risk of getting into an accident than mature, more experienced drivers. Insurers generally charge more for young people below the age of 25.
  • Your gender: Statistically speaking, many more men than women die each year in car accidents — more than double according to the National Highway Traffic Safety Administration. Men tend to drive more miles and engage more frequently in risky driving, such as driving while intoxicated, speeding, and not using seat belts. As a result, women often pay less for car insurance than men.
  • Your marital status: Young, single males are more likely to get into car accidents and will likely end up paying more for car insurance because of it. If you’re married, you might see lower rates as car insurers tend to view you as being less risky.
  • Your credit: Just as your credit score is calculated from the information in your credit report, so too is your insurance score. Your insurance score measures how well you manage your money, and insurance companies have found that this helps predict the likelihood of you filing a claim.
  • Your car: When determining your premium, insurers take into account the value of your car, the cost of repairs, the likelihood of theft, and the overall safety record of your car. If your car is packed full of safety features, you’ll likely qualify for car insurance discounts. Insurers also consider the damage your car can inflict on another car. In general, a new car will be more expensive to insure than an older car.
  • The coverages you choose: The more things your auto insurance covers, the more you’ll pay. The deductible you choose if you purchase collision and comprehensive coverage also affects how much you’ll pay for coverage.

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 drop by 18% 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.

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.

When does car insurance 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. As mentioned earlier, your driving record is taken into account when determining your premiums. After an at-fault accident, your insurer will likely consider you a higher risk and reevaluate your auto insurance rate.

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.

In general, these increases tend to stay on your premium for three 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. Where available, this can be earned for free as a result of a clean driving record or it can be purchased as an add-on to your policy. If this feature is part of your policy, it can help keep your rates from going up after your first at-fault accident.

How long after a ticket does car insurance go down?

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 within three years. However, 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.

So when does car insurance go down?

Car insurance rates are determined by a variety of factors, so, unfortunately, there’s no one single answer for everyone. As you become more experienced as a driver and it shows in your driving record, you should see your car insurance go down.

If you were recently in an at-fault accident or received a ticket for a traffic violation, the increase in your premiums might last a few years. During that time, try to maintain a clean driving record. This will help ensure your rates begin to go down as you prove you’re not a risky driver.

Bottom line

If you really want to save money on car insurance, your best bet is to comparison shop. Although you might 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. 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.

You can talk in-person to an insurance agent to get these quotes, or you can easily do it yourself by using an online insurance marketplace. Many websites offer the ability to fill out just one form and receive multiple car insurance quotes back in return. This way you can compare prices, coverage, and discounts easily from the comfort of your home.

  • You could save up to $600 with some companies
  • Compare dozens of providers in under 5 minutes
  • Fast, free and easy way to shop for insurance
  • Quickly find the perfect rate for you

Author Details

Matt Miczulski

Matt Miczulski is a personal finance writer specializing in financial news, budget travel, banking, and debt. His interest in personal finance took off after eliminating $30,000 in debt in just over a year, and his goal is to help others learn how to get ahead with better money management strategies. A lover of history, Matt hopes to use his passion for storytelling to shine a new light on how people think about money. His work has also been featured on MoneyDoneRight and