Does Car Insurance Costs Decrease Over Time?

Car ownership can be an expensive proposition when you're young, but the cost of insurance does tend to decrease as you go along. There are many ways to lower the cost of your car insurance over time.

Age Plays a Part

One of the benefits of getting older is seeing a decrease in your car insurance premium. Insurance providers use age as one of the deciding factors when assessing risk. They’ve determined younger drivers are statistically more likely to be involved in accidents than more experienced ones. From 16 and 24, you’re considered a “high-risk” driver, but when you turn 25, you might notice the cost of your insurance begin to decrease. This trend will continue as you get older.

Maintain Good Credit

The amount of credit you build over time can also decrease the cost of your car insurance. A good credit history shows responsibility and insurance providers often take that into account when determining the cost of your premiums. Maintaining a good history of credit card payments, student loan repayment, and mortgage payments does pay off in terms of car insurance rates.

Have a Good Driving Record

A good driving record is a big factor in determining your car insurance rates. A steady history of no speeding tickets, accidents, or damage to your vehicle shows the insurance company you’re a responsible driver and they won’t constantly be paying to cover your reckless behavior. You might also convince them to lower or maintain your premium by regularly enrolling in defensive driving classes, though every provider doesn’t offer this discount.

Car ownership can be an expensive proposition when you’re young, but the cost of insurance does tend to decrease as you go along.

Staying Loyal to Your Provider

Insurance providers are loyal to customers who are loyal to them. Sticking with your provider rather than hopping from insurance company to insurance company helps cement a good relationship. Many insurance providers are willing to reward loyalty with lower premiums.

Keeping the Same Car

Your car’s actual cash value (ACV) is taken into account when determining your insurance premiums and deductibles. Over time, the value of your car will depreciate, making it less expensive to repair and your insurance will follow suit. The longer you own your car, the less you’ll have to pay for insurance on it.