How Age Affects Car Insurance Rates

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Written by Michelle Lambright Black Edited by Nick Versaw Reviewed by Amanda Clear

Updated December 18, 2023

Age is one of the most significant factors insurers use to calculate auto insurance rates. The average cost of car insurance for drivers of all ages is $129 per month for liability coverage, but auto insurance rates can vary dramatically from one age group to the next.

It’s important to understand how your age can affect car insurance premiums. This knowledge can help you confirm whether you’re getting a good deal on your current car insurance coverage or discover if it’s time to shop around for a new policy with lower rates.

In this guide, we’ll break down how and why age affects car insurance rates, average rates for each age, and a few tips all drivers can use to get cheaper rates.

Key Takeaways:

• Young drivers pay higher car insurance rates because they’re more likely to file a claim.
• The average 40-year-old driver pays around 50% less for car insurance than the average 18-year-old.
• Drivers of any age can save by comparing quotes, researching discounts, and more.

Why Does Age Affect Car Insurance Rates?

When you apply for a new car insurance policy, the insurer will review your unique insurance profile to assess the risk of taking you on as a customer. And if it believes the odds of you filing a claim are higher than normal, your auto insurance quote will be higher.

For example, if you have a driving history littered with speeding tickets, you’ll likely face higher insurance premiums than you would with a clean driving record. Likewise, a younger driver would pay a higher average rate than an older driver because their inexperience behind the wheel tends to mean a higher chance of causing an accident.

Teen drivers crash their vehicles almost four times as often as drivers older than 20, according to the Insurance Institute for Highway Safety (IIHS). Additionally, the fatal crash rate is around three times as high for teenagers as it is for drivers 20 and older.

Does age affect car insurance rates more than other factors?

In general, your age is one of the most important factors affecting your auto insurance premiums. The average cost of liability-only car insurance for an 18-year-old driver is $278 per month, according to Compare.com data. By comparison, the average 40-year-old driver pays less than half of that figure — $137 per month — for the same coverage.

Several other key factors help determine your car insurance rates, as well. Your driving record, vehicle type, and even your credit score (in some states) influence how much you pay for auto insurance. And, of course, the types of coverage you choose, how much coverage you need, and your deductible amount can all play significant roles in determining your auto insurance costs.

Does gender affect car insurance rates, too?

Women have fewer — and less serious — accidents than men, according to the Insurance Information Institute (Triple-I). The IIHS has also found that men drive more miles than women and are more likely to participate in certain risky driving behaviors, such as speeding, not wearing a seat belt, or driving under the influence.

And that trend is even more severe among teen drivers. The Centers for Disease Control and Prevention (CDC) found that the fatality rate in motor vehicle crashes is three times as high for male drivers compared with female drivers of the same age.

As a result, insurance companies often price car insurance policies according to the driver’s gender. Young men, in particular, may be considered a higher-risk to insure and generally face higher car insurance costs.

But it’s important to note that certain states don’t allow the use of gender to calculate auto insurance rates. As of this writing, the practice is banned in California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania.

Average Car Insurance Rates by Age

Let’s take a look at how average rates change as you get older. The table below breaks down average rates for each age from 18 years old to 80. Keep in mind that most states require you to be at least 18 years old to sign a legally binding contract, so data for 16- and 17-year-olds is limited.

Young drivers pay significantly higher car insurance rates compared to those who are older and have more driving experience. Insurers know that the typical driver’s risk behind the wheel — to cause an accident and subsequently file an insurance claim — declines with age, meaning that as you get older, your rates will steadily decrease.

Premium prices are the highest for teenage drivers and begin to become significantly more affordable around age 25. By the time you’re 40 years old, you can expect insurance companies to charge about half of what a typical 18-year-old driver pays.

Rates continue to decline well into retirement age, but they begin to creep back up a bit around age 70. Insurance companies have determined that drivers around this age start to become more accident-prone due to slower reaction times and other physical limitations — but even at 80 years old, rates are still more than 35% cheaper than they are when you’re 18.

3 Ways Drivers of All Ages Can Save on Auto Insurance

Finding ways to save money is important, especially if you’re facing higher insurance premiums due to your age. Still, all age groups can benefit from lower insurance rates.

If you’re looking for inspiration, here are three simple ways to save on your auto insurance.

1. Look for discounts

Many insurance companies offer a wide array of car insurance discounts to eligible drivers. As a young driver, you may be eligible for numerous discounts for things like being a good student or leaving your car at home while away at school.

And drivers of any age can find discounts for driving fewer miles, taking an approved defensive driving course, or insuring both their home and car with the same company, among others.

2. Choose a safe car

Another way to save money on car insurance, regardless of your age group, is to purchase a safe vehicle. In general, vehicles packed with safety features are some of the cheapest cars to insure.

By comparison, sports cars tend to feature far more expensive car insurance premiums. For example, the Dodge Charger — which boasts a powerful V8 motor and sporty handling — is typically the most expensive vehicle to insure. So, if your priority is saving money on auto insurance, keep these factors in mind when you purchase your next set of wheels.

3. Compare quotes from multiple insurance companies

No matter your age, comparing quotes from multiple car insurance companies can often be the best way to save money on auto insurance. There’s no such thing as the perfect car insurance policy for everyone, but when you take the time to shop around to see the rates and coverage options that multiple insurers have to offer, you can make sure you’re getting the lowest rates available for your situation.

Car Insurance Rates by Age FAQs

Below are some of the most common questions drivers like you ask about how age affects your car insurance rates.

At what age is car insurance the most expensive?

Car insurance tends to be most expensive for brand-new drivers. We’ve found that 18-year-old drivers pay an average of $278 per month for liability-only auto insurance — more than any other age group in our study. Most 16- and 17-year-old drivers are on their parents’ policies, which limits available data for these drivers.

What age group has the cheapest insurance?

In general, the lowest average insurance rates belong to drivers between the ages of 50 and 70. Average car insurance prices for these drivers range between $113 and $120 per month for basic liability coverage.

Why is car insurance so expensive for young drivers?

Younger drivers pay higher insurance premiums because they’re riskier to insure. Drivers between ages 16 and 19 are more likely to be in a car accident than any other age group, according to the CDC. Teen drivers are also three times as likely to be involved in a fatal crash as drivers aged 20 and older.

When does car insurance go down?

Car insurance prices start to decline substantially around age 25. The average 40-year-old driver pays 50% less for liability coverage than an 18-year-old.

Methodology

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.

Sources

1. Insurance Institute for Highway Safety, “Teenagers,” accessed December 10, 2023.
2. Insurance Information Institute, “What determines the price of an auto insurance policy?,” accessed December 10, 2023.
3. Centers for Disease Control and Prevention, “Teen Drivers and Passengers: Get the Facts,” accessed December 10, 2023.
4. Insurance Institute for Highway Safety, “Fatality Facts 2021: Males and females,” accessed December 10, 2023.

Michelle Lambright Black Personal Finance Writer

Michelle Lambright Black is a credit expert, freelance writer, and founder of CreditWriter.com. She has more than 20 years of experience writing and speaking about credit and money, and focuses on helping families and small business owners make smart, informed decisions about their credit, money, and financial products (including insurance). Michelle's work has appeared in publications such as Yahoo! Finance, Reader's Digest, Parents, FICO, Forbes, Bankrate, The Seattle Times, MarketWatch, BuySide from Wall Street Journal, USA Today, and more.