DOES CAR INSURANCE GO DOWN AT 25 OR IT IS A MYTH?
If you are driving and if you do not want your driver’s license to get confiscated, it is best to get covered by car insurance. If you do not want to invest a lot on car insurance and its various coverage terms, you may want to go for the state required minimum insurance. The best part is that as you grow up, the rates of the car insurance keeps on going down. If you ask that does car insurance go down at 25, the answer is yes, provided there is no other anomaly in your case.
Car insurance rates by age
The maximum car insurance that you will have to pay is when you would be aged between 16 to 18 years. As you grow older than 18 years, your car insurance rates get slashed by as much as 20% of what you were paying before. Once you cross 21 years, it gets further reduced by almost 50% of what you were paying when you were between 18 to 21 years of age.
At 25 years, you get into the bracket where the car insurance gets down to real low at an average of less than $2000 as compared to the more than $8000 when you were between 16 to 18 years of age. It is true that there are several other factors that impact the rate of car insurance, but age is certainly one of the major ones.
Why it goes down at 25
As per the insurance companies, as you grow 25 you tend to develop more experience in driving which will lead to fewer accidents. As per records too, people who are under 25 are more prone to get into an accident than others. Insurance companies would always look at the risk factors while they insure someone, and as the risk of people under 25 is higher, their insurance rates are higher too.
However, if you think that being 25 is a strong enough reason for insurance rates to go down and it goes down automatically as you turn 25, you would be highly mistaken. As already mentioned above, age is just one of the factors. Being 25 just puts you in the same bucket of drivers who have a trend of committing less accident than those younger brats who are less than 25. However, if you got a tainted driving history or your credit history is not very impressive, or you drive a car more than a regular driver does, chances are very weak that your car insurance will go down even if you cut the 25th birthday cake of your life.
Some points to remember
If you happen to switch states, your insurance rate will also vary even if you turn 25. If at 24 years, you were paying a certain amount in Maine, after moving to Michigan you may yourself paying a lot more even though you might have turn 25 by then. It is so because average insurance rates of Michigan are higher than that of Maine.
It is also to be noted that car insurance rates keep on dropping till the time you reach the age of 60, provided other factors remain static and healthy for you. Once you reach 60, it starts going up again slightly as with growing age you would become more risk-prone getting yourself involved in an accident.
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