Many factors come into play when insurers calculate the cost of car insurance - and age is certainly one of the main ones. If you want to get on the road to commute to work or college or for leisure purposes, you could find that car insurance is incredibly expensive. So, will your car insurance go down at 25? Keep reading to find out more.
Age and car insurance
As a general rule of thumb, you can expect to pay the most for your car insurance when you’re under 25. Once people are over 25, they tend to find that the cost of their car insurance starts to fall. The price usually declines gradually between the ages of 25 and 60.
For most, car insurance is more expensive the younger you are, with the price going down as you enter a new decade. People in their 30s often pay more than those in their 40s, who in turn fork out more than those in their 50s. Drivers aged between 50 and 60 usually pay the lowest prices.
Once you’re over 60 years old, car insurance premiums tend to rise a little. This does not usually mean a drastic increase, but a price roughly equivalent to what those between 40 and 50 pay.
Why is age so important?
No claims discount
A no-claims bonus is a tally of the number of years in which you haven’t filed a claim through your policy. For every year you’re insured but don’t make a claim, you will earn another year’s worth of no-claims bonuses. Insurance companies often recognise this and will provide a discount on your premium if you’ve got a good track record.
However, younger drivers have had no chance – or just a year or maybe a few – to build up their no claims bonus entitlement. For instance, a 17-year-old who has just passed their test will not yet have any driving record, so they cannot qualify for a discount. Insurers do not know at this point how likely it is that such a driver will make a claim, so they charge more to make sure they are covered.
Car insurance premiums are calculated by taking risk into consideration. Statistically, younger drivers make more claims, so they are higher risk. Thus, the premium they pay will reflect this.
Can I lower the cost?
While there’s no denying that drivers aged between 17 and 25 pay the most for their car insurance, there are some things you can do to ensure you pay less than you need to.
Telematics or Black Box
Black Box or Telematics car insurance particularly appeals to young drivers. This technology is accessible via a smartphone app, or it can be installed in the car. Your driving habits are recorded, so if you are a careful driver, it should help to lower your premium.
Adding a named driver
If another adult over 25 is likely to use your car, then you could add them as a named driver - although the person who drives the car most must be the actual policyholder.
All cars are placed into insurance groups, so one of the most effective ways to lower your premiums is to buy a car that belongs to a low insurance group. The lower the group, the cheaper the car insurance will be.
If it’s possible to pay annually for your car insurance, it will almost always prove cheaper. Insurers charge you more to pay monthly, which adds to the overall cost.
Insurance companies rely on the fact that people are often too busy to shop around, therefore the renewal price they initially offer may not be competitive. You can compare premiums from other insurers by using price comparison sites, but they do not cover all insurers so you might need to check some separately. If you do get a better quote, you could ask your current insurer to match it.