How Age Affects Car Insurance Costs

When calculating a car insurance quote, one of the primary factors insurance companies consider is age. A driver's age is used by auto insurance companies to assess their driving experience and accident risk.

When a driver has more experience behind the wheel, they are less likely to be involved in an accident and file a claim for compensation. That means they'll be less expensive to insure and will receive lower quotes.

Average car insurance by age

We compared quotes from more than 20 different companies and discovered that the youngest and oldest drivers pay significantly more than the middle-aged drivers.

The following are the average car insurance costs by age:

  • 16- $6,777
  • 17- $6,225
  • 18- $5,473
  • 19- $4,163
  • 20- $3,816
  • 21- $3,057
  • 25- $2,184
  • 30- $1,922
  • 35- $1,907
  • 40- $1,863
  • 45- $1,816
  • 55- $1,690
  • 65- $1,737
  • 75- $2,037
  • 85- $2,416

Quotes for teenagers are three times the cost of quotes for drivers in their mid-30s and nearly four times the cost of quotes for drivers in their mid-50s. When young drivers gain more experience and reach the age of 25, their car insurance costs drop by about 30%.

Costs continue to fall with each passing year. Drivers will see their best rates once they reach the age of 50. However, around the age of 60, auto insurance costs begin to rise and begin to compare to what drivers see in their 40s.

How gender affects car insurance rates

Gender also has an impact on car insurance costs. Men will pay about 12% more than women over their lifetime, though the price difference varies by age.

Men, for example, paid an average of 20% more than women in the four cities we studied until the age of 21. This disparity closes after the age of 30, when our sample female driver paid about 2% more than our sample male driver.

The table below shows how age and gender affect auto insurance premiums:

Driver's age

Male driver

Female driver

Average

16

$7,778

$5,776

$6,777

17

$6,852

$5,597

$6,225

18

$5,889

$5,056

$5,473

19

$4,489

$3,838

$4,163

20

$4,109

$3,524

$3,816

21

$3,268

$2,845

$3,057

25

$2,180

$2,188

$2,184

30

$1,902

$1,942

$1,922

35

$1,878

$1,937

$1,907

40

$1,828

$1,897

$1,863

45

$1,791

$1,841

$1,816

55

$1,679

$1,702

$1,690

 

Why do younger and older drivers pay more for car insurance?

Young drivers pay more because statistics show that teenagers are inexperienced, making them more likely to get into car accidents compared to other age groups.

The Insurance Institute for Highway Safety states:

  • Drivers between the ages of 16 and 19 are three times more likely to be involved in a car accident.
  • Drivers between the ages of 15 and 20 accounted for 10% of all fatal accidents in 2015, despite accounting for only 7% of all licensed drivers.

As a result, because your insurer believes you're more likely to crash when you're young, your rates will be higher. Experienced drivers in their mid-30s to late-50s typically have better driving skills and road maturity, resulting in lower accident rates.

However, once drivers reach their 60s, the trend begins to reverse as age and slower reflexes begin to impact driving. Seniors are typically charged the highest rates by insurers once they reach the age of 70. An 80-year-old driver pays slightly more than a 25-year-old.

How to save money on car insurance as a younger or older driver

Shopping around, applying for discounts, and joining someone else's policy are the most effective ways for young and elderly drivers to save money on auto insurance.

Shopping around

When it comes to insurance costs, shopping around is the most effective way to save money. In our research on the best car insurance for teens, we discovered that certain companies are more adept at pricing young drivers.

  • Erie is the most affordable insurer for young drivers.
  • Geico was more expensive for younger drivers than State Farm, but the opposite is often true for drivers over the age of 25.

We recommend getting quotes from at least three different companies. Most large insurers allow you to start a quote online, making price comparison easier.

Discounts

Discounts are a simple way for both young and old drivers to save money on their insurance premiums.

Maintaining good grades (for young drivers still in school) and taking defensive-driving courses can save drivers up to 10% on car insurance.

Companies such as Allstate offer a "55 and Retired" discount, in which safe, retired drivers over the age of 55 automatically qualify for a 10% discount. Some companies also allow drivers over the age of 55 to enroll in defensive driving courses in order to qualify for discounts.

Joining your parents' policy

We discovered that joining your parents' auto policy is roughly half the price of starting your own.

Because your parents are assuming some of your risk as a young driver, insurance companies are more willing to offer a lower price.

However, keep in mind that your parents' rate will skyrocket. It's a surefire way to get a lower rate if they're still willing to add you.

Methodology and sources

We examined two sample drivers to determine the rates for each age group:

  • A man and a woman
  • Our test drivers drove a 2015 Toyota Camry.
  • Each of them drove 12,000 miles per year.
  • The drivers were covered by 25/50/25 liability insurance, as well as collision and comprehensive coverage.

We obtained quotes for each age group from three cities in New York, California, and Michigan.

The Insurance Institute for Highway Safety provided statistics on teen accidents.