When Do Car Insurance Rates Go Down?

High car insurance rates are frustrating, but they won’t drop overnight. That’s because factors like your age, state laws, and driving history affect your rates. Even with important changes to your risk profile — aging out of your teens or improving your driving record — you may not see an immediate rate drop.

Fortunately, while you wait for these long-term factors to improve your rates, you still have options for lowering your rates. Switching companies is one, but if you’re not ready to do that, increasing your deductible and scaling back on coverage can still help you save on your premiums.

Key Takeaways:

• Car insurance rates don’t change mid-policy — you’ll have to wait until your policy renews.
• Your car insurance premiums usually decline as you age, but they’ll increase slightly once you reach age 70.
• Switching insurance companies and taking advantage of your insurer’s discounts are the quickest ways to reduce your car insurance.

When You Can Expect Your Car Insurance Rates to Go Down

Most car insurance policies last six or 12 months and then renew. You usually have to wait until your policy renewal to see any change in your rate. Still, your insurance company might not guarantee a lower rate when renewing your policy. It takes time for rates to go down, so you’ll need to be patient.

The good news is that certain events typically bring your rate down. We explore these in the sections below.

As you age

Your age significantly affects your car insurance rates. Young drivers pay some of the highest auto insurance premiums because they have less experience and tend to engage in risky driving behavior that increases their risk of car accidents. Teen crash rates are four times as high as for drivers aged 20 or older, according to the Insurance Institute for Highway Safety (IIHS).

Fortunately, rates begin to decline once you reach age 20, and this continues until you reach age 70, when premiums start to creep up again a. Older drivers experience physical and cognitive vulnerabilities that increase their risk of accidents, serious injury, or death from an accident, according to the Centers for Disease Control and Prevention (CDC). That added risk means your rates will likely go up slightly in your senior years.

The table below shows average rates for certain age groups and the rate difference compared to the national average, according to Compare.com data.

The average monthly premium for teens is a staggering 72% higher than the national average cost of car insurance, according to our analysis. Drivers in their 60s are the least expensive group to insure, with rates 27% below the national average — and $133 per month less than teens.

But no matter your age, you can reduce your premiums by maintaining a clean driving record. Let’s see how improving your driving records can help.

As your driving record improves

Your driving record is another factor that affects your rates. It helps insurers determine your likelihood of filing a car insurance claim. Risky behavior, such as speeding, at-fault accidents, and driving under the influence (DUI), can lead to higher premiums.

Speeding tickets and at-fault accidents usually stay on your record for three to five years, depending on your state. But the wait could be much longer for a DUI. Each state has a “lookback period” that determines how long infractions can stay on your driving record.

For example, in California, most collisions and DUIs remain on drivers’ records for three years, according to the California Department of Motor Vehicles.

The following table shows the average monthly premiums for different driving infractions and the rate difference compared to a clean driving record, according to Compare.com data.

Drivers with a DUI will see the highest increase in their monthly premiums — a DUI increases premiums by an average of 50%, according to our data.

Reaching adulthood and striving for a clean driving record aren’t the only ways to reduce your premiums. In the next section, we’ll discuss other reasons you may see your rates decrease.

Other Reasons Your Car Insurance May Go Down

Insurance rates can fluctuate for many reasons, many of which you can control. You’ll find several common ones listed below.

Switching car insurance companies

One of the most effective ways to reduce your car insurance payment is to compare rates from multiple insurance companies. Switching auto insurance companies can lead to an immediate rate decrease — and you don’t have to wait until your policy renewal to make the switch.

Just be sure to read the policy details, including the fine print, to make sure the companies offering the cheapest rates also provide the same types and amounts of coverage.

Moving to another location

Moving to a new location can also lead to lower auto insurance rates because local factors like crime rates, population density, and more affect your rates. For example, if you live in a ZIP code with high crime rates but move to an area with less crime, your rates should drop because car theft is less likely.

You also might see your rate go down if you move from a big city to a small town or rural area, according to the Insurance Information Institute (Triple-I). That’s because a lower population density means fewer cars on the road and a lower risk of car accidents.

Moving from a state with higher liability coverage requirements to a state that requires less coverage can also cut your insurance costs. But you’ll have to consider whether the change would leave you with less coverage than you need.

Dropping optional coverages and limits

Eliminating optional coverages and reducing your coverage limits can lower your bill. For example, if you have an older vehicle that isn’t worth much and that you can afford to replace, you probably don’t need full-coverage insurance. If you’re an empty nester, you might not need as much liability coverage as when you had new drivers on your policy.

Before making changes to your policy, check your state’s minimum liability requirements to avoid penalties. And if you finance or lease your car, check with your lender to find out what coverages it requires — most require you to maintain full coverage, for example.

Applying discounts

Most insurance companies offer several ways to earn discounts to reduce the cost of car insurance. For example, you can earn a multi-policy discount when you purchase your insurance policies from the same company. Some insurers offer a loyalty discount for remaining a customer for a certain period of time.

You could get a good driver discount for practicing safe driving habits, and students earn a good student discount for getting good grades. These are just a few of the many discounts insurers offer, so be sure to ask your agent what you qualify for.

Increasing deductibles

A deductible is the amount you’re responsible for paying when you file a claim. By increasing your deductible, say from $500 to $1,000, you shift financial responsibility from the insurance company to yourself. Less responsibility for the insurer means lower rates for you. But make sure you can afford the extra out-of-pocket cost if you need to file a claim.

How Long Does It Take for Car Insurance to Go Down?

How long it takes for your car insurance rates to drop depends on a variety of factors. Your age and driving record play a huge role in your risk level. Once you get older and gain more experience behind the wheel, insurers view you as less risky to insure. If your driving record makes you high-risk, your rate won’t drop until the infractions fall off your driving record.

And as we mentioned before, a rate decrease won’t happen overnight. It usually takes at least six months — but often years — to see a dramatic rate drop. Making changes to your policy — such as dropping collision and comprehensive coverage or increasing your deductible — can have an immediate effect on your premiums.

Remember, insurers don’t guarantee a rate decrease. But one of the best ways to expedite the process as you work on improving your overall risk profile is to shop around regularly and compare rates from different insurers.

FAQs About When Car Insurance Rates Go Down

The more you know about the factors that influence car insurance rates, the better you’ll be able to reduce your premiums. Here are answers to questions commonly asked about when car insurance rates go down.

Does one year of no claims decrease your car insurance cost?

Possibly, but insurance companies often wait until you’ve gone a few years with no claims before decreasing your rates. For example, GEICO rewards customers who go five years without an accident with a good driver discount.

Will car insurance go down when you turn 25?

Probably. Car insurance rates usually drop when you reach 25. But this all depends on factors like your driving record and where you live.

At what age is car insurance most expensive?

Car insurance is the most expensive for teen drivers, according to our analysis. Teens pay more because of their inexperience and higher accident rates compared to drivers ages 20 and older.

Does car insurance go down after six months?

It’s possible. Car insurance can go down after six months or whenever your policy renews, but there’s no guarantee.

Why isn’t your car insurance going down?

Your car insurance rates may not go down for various reasons. You might still be at a high-risk age, have incidents on your driving record, or live in an area where insurance rates are higher than average.

Even if your risk factors improve, keep in mind that car insurance prices have risen by 19.5% in the last year alone, according to the most recent Consumer Price Index — this inflation alone could be keeping your rates high.

Data Methodology:

Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates 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 rates listed in this article have been collected 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 readers with insights into how auto insurance companies determine their premiums.

Sources:

1. Insurance Institute for Highway Safety, “Teenagers,” accessed August 6, 2024.
2. U.S. Centers for Disease Control and Prevention, “Older Adult Drivers,” accessed on August 7, 2024.
3. American Family Insurance, “What’s a Chargeable Incident, and Does It Affect Your Insurance?,” accessed on August 7, 2024.
4. Justia, “Insurance Consequences of DUI,” accessed on August 7, 2024.
5. Nolo, “DUI or DWI Punishments and Penalties,” accessed on August 7, 2024.
6. State of California Division of Motor Vehicles, “Retention of Driver Record Information,” accessed on August 7, 2024.
7. Insurance Information Institute, “What Determines the Price of an Auto Insurance Policy,” accessed on August 7, 2024.
8. Insurance Information Institute, “Automobile Financial Responsibility Laws by State,” accessed on August 7, 2024.
9. Consumer Federation of America, “Auto Insurance Regulation: What Works 2019,” accessed on August 7, 2024.
10. Insurance Information Institute, “Nine Ways To Lower Your Auto Insurance Costs,” accessed on August 7, 2024.
11. U.S. Department of Labor Bureau of Labor Statistics, “Consumer Price Index — June 2024,” accessed on August 7, 2024.