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How much is car insurance for a 25 year old? If you have some driving experience, but it is limited, you might be asking how to get the best rates. The secret is to shop around, keep your car in good condition, and do your best to prove to the insurance company that you are a low-risk driver. See the step-by-step instructions below to help you save a few hundred dollars a year.
An Overview of Car Insurance Rates for 25-Year-Old Drivers
Car insurance companies use different milestones when calculating your premium. Reaching the age of 25 is one of them. Insuring a car costs less as you get older, and 16-year-olds are hit with bills that can reach as high as $7000 per year. Generally, the cost of car insurance for a 25-year-old driver is around $250-$300 per month, but this depends on your exact age, your vehicle, and your driving history. You will get a discount for every year you have been driving without an accident and claim, so the longer you have had insurance, the better price you are going to get.
How Companies Calculate Car Insurance Rates for Young Drivers
Your age is not the only thing that insurance companies consider when giving you a quote. It is one of the most important factors, though. Here are some other factors that will determine the price:
- Your vehicle type. After you reach 25, the car you drive will have a greater impact on your price than your age will. Your car’s safety ratings, engine size, and age, as well as the average cost of repair and resale value, will affect your yearly premium price.
- Driving record. Of course, the more experience you have driving, the lower the risk category you will be in. The more the insurance company knows you, the more they will trust you.
- Your credit record. The better you are at paying your bills and credit on time, the more responsible you will look, and the more the insurance company will trust you.
- Your location. Car insurance costs differ from one state to another.
- The annual mileage you cover. The more you drive, the more likely you are to get involved in an accident.
Average Car Insurance Premiums for 25-Year-Olds
If you are a 25-year-old with a clean driving history, you will be in a lower risk category than someone who has had speeding tickets or a DUI. You can expect to pay between $700 and $1600 per year on average, depending on your car and your credit rating.
If you have a driving record that includes a few penalties, or maybe an accident, your price will increase significantly. One DUI will hike up your rates to between $1200 and $3000 per year on average. A DUI will increase your price more than poor credit, speeding tickets, or even an at-fault crash.
After you reach 25, your car insurance cost is expected to go down, but only if other conditions remain the same. If you make a claim, get a DUI, or cause an accident, this is not the case.
Male and Female Car Insurance Costs for 25-Year-Old Drivers
Males generally pay more for car insurance at a young age. Eighteen-year-old male drivers pay up to 50 percent more for their insurance than females. This price difference evens out when people are in their 30s. Read more about the insurance price differences of genders on the Car and Driver blog.
In some states, such as California, Hawaii, Montana, and North Carolina, there are no differences between male and female car insurance costs.
When you are 25, your gender makes little or no difference. Males pay around 2.5 percent more than females at this age.
At the age of 24, there is a 6 percent gap between male and female car insurance premiums, and females pay less. According to the national average, This is a smaller difference than what males pay before and after the age of 18, which is an 11 percent difference.
Read more gender-based car insurance insights on the Value Plugin site.
The Best Car Insurance Rates And Companies for Younger Drivers
Annual premiums differ from one company to another, so you have to shop around. The cheapest insurer was Erie, with an average annual premium of $1518, and the most expensive one was Allstate at $5074 in 2020.
Your location also matters. Consider yourself lucky if you live in North Carolina, which is the state with the lowest average cost of insurance for 25-year-olds. The most expensive state to get coverage would be Michigan, which has an average premium of almost three times the national average. Check out our car insurance rate review.
In California, you can get car insurance for $1847 from Mercury, while GEICO provides the cheapest rate in New York for $2244. To show you how much your location matters, GEICO provides the same coverage for 25-year-olds in North Carolina for only $564.
Your Guide to Finding Cheap Car Insurance If You Are 25
Shopping around is the best way to start your quest for cheap insurance. Each company will have a different algorithm, and they will ‘like’ or prefer a certain age group or demographics over another. This is why you need to look for multiple quotes from a price comparison site.
You don’t just have to choose the right company; you also have to check the discounts offered by each of them. Look for military discounts, and take advantage of multiple driver coverage discounts. You might save by staying on the same policy as your parents. If you are still in college or are taking a full-time course, you can apply for student discounts. Some companies will offer you a better price if you have certain safety features or tracking systems installed. NerdWallet provides more information on how prices are calculated here.
If you find all the prices too high, you might invest in developing your driving skills further. This will make a big difference if you have a limited driving history or a less-than-perfect driving record. Take a defensive driving course and see your premiums drop.
Finally, it is common sense to pay only for the coverage you use. If your old car is worth only a few hundred dollars, taking out a comprehensive and collision policy might be a waste of your money.
Sources used:
https://www.valuepenguin.com/25-year-old-car-insurance
https://wallethub.com/edu/ci/average-car-insurance-rates-by-age/69321
https://www.nerdwallet.com/blog/insurance/car-insurance-basics/how-much-is-car-insurance/
https://www.moneyunder30.com/best-car-insurance-for-young-adults
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