Getting Insurance for First-Time Drivers Over 25
Last Updated on August 10, 2020
As a driver over 25, you typically pay cheaper insurance rates than younger drivers. However, if you are a first-time driver over 25, then rules can be different.
New drivers at any age pay higher insurance premiums. Sometimes, new drivers over 25 pay higher insurance rates than experienced teenage drivers. Fortunately, by comparing insurance rates today, you can get the cheapest insurance rates even as a first-time driver over age 25.
Today, we’re explaining everything you need to know about getting insurance for the first time as a driver over 25, including how to pay the cheapest insurance rates as a 25-year old new driver.
Expect Higher Premiums as a New Driver Over 25
Teenagers pay the highest rates for car insurance. Statistically, teenage drivers are more likely to make a claim and cause an accident than drivers of any other age. Teenage drivers are inexperienced. They may not know how to drive in certain weather or traffic conditions. They might have limited experience driving at night or in the snow or rain.
As a 25-year old new driver, you also lack driving experience, which means you’ll pay higher rates for car insurance.
Typically, car insurance prices drop at age 25. Most 25-year old drivers have 5 to 9 years of driving experience. If you have no accidents, speeding tickets, claims, or other incidents on your driving record, then you have proven that you’re a safe driver. Your insurer rewards you with lower insurance premiums, and premiums continue dropping as you get older.
Unfortunately, as a new 25-year old driver, these rules may not apply. You have no driving experience and no verifiable driving record.
It’s possible you’re the best driver in the world, and it’s possible you will go the rest of your life without getting a speeding ticket or causing an accident.
Unfortunately, it’s also possible that you’re the worst driver in the world, and that you’ll cost your insurance company thousands of dollars over the next few years.
Until you have a verified driving history, your insurer cannot tell what type of driver you are. You could be the world’s greatest driver – or the world’s worst driver. Until you have an insurable driving history, your insurer errs on the side of caution by charging higher rates.
How Much Experience Do You Need for Rates to Drop?
Insurance companies like experienced drivers with a clean driving record. They’re the safest, lowest-risk drivers to insure.
If you have zero driving experience, then your insurance company charges high rates – regardless of whether you’re 16 or 25 years old.
As you get more driving experience, rates should drop. After a few years of driving experience, your insurance rates can get cut in half.
Typically, insurance companies significantly reduce premiums after 3 years of driving experience.
However, rates drop every year you go without an accident or claim. You might pay $4,000 per year for car insurance as a new driver at age 25. One year later, you might pay just $3,500 per year at age 26, dropping to $2,800 per year by age 27. By the time you’re 28, you’re paying just $2,000 per year for car insurance – half of what you paid as a new driver at age 25.
The most significant cost savings occur after eight years of insured driving history. That’s why rates significantly drop at age 25 for most drivers. Many drivers get their driver’s license at age 16. After 8 years of driving, these drivers are now 25 and have a verified driving record.
If you’re a new driver at 25, then insurance premiums should drop significantly after age 33 – assuming you maintain a clean driving record.
How Long Have You Had Your License?
Sometimes, people get their licenses in their teenage years, but they don’t drive their own vehicles or get their own insurance until 25.
In this case, your insurer could consider you an experienced driver. Some insurers look at the date on which you got your license – not your insured driving history – to calculate rates.
You may still pay high rates for car insurance, but you could pay lower rates than other 25-year old first-time drivers if you’ve had your license for more than 3y ears.
Discounts Available to New 25-Year Old Drivers
Yes, you’ll pay higher insurance premiums as a new 25- year old driver. However, you can still take advantage of certain discounts to lower premiums.
Common discounts available to new 25-year old drivers include:
Paid in Full Discounts: You can save 3% to 5% on premiums by paying your premiums in full upfront. Instead of breaking your insurance premiums in monthly installments, you can pay a lump sum every 6 to 12 months to save money.
Good Student Discounts: Many insurance companies offer good student discounts to full-time high school or university students. Some insurers only apply this discount to drivers under 25. Others apply it to full-time students of any age. If you have an average of B or higher in school, then you could save.
Multi-Vehicle Discounts: If you have multiple vehicles registered to your address, then you could qualify for a multi-vehicle discount. This multi-vehicle discount can reduce the cost of insurance across all your vehicles.
Bundling Discounts: Do you have multiple insurance policies? If you have homeowners insurance, car insurance, and other insurance policies, then bundling all policies together with the same company can lead to significant savings.
Driver’s Education Discount: Did you take a driver’s education course? If you took a driver safety course or a similar course, then you could qualify for a small discount on car insurance.
Compare Car Insurance Quotes to Pay Lower Rates
You can’t change your age or driving record. However, you can change your car insurance company.
Some car insurance companies like having younger, inexperienced drivers in their pool. They balance out the older, more experienced drivers. You pay higher premiums that offset the lower premiums paid by older drivers.
As an inexperienced 25-year old driver, it’s crucial to compare insurance rates with as many companies as possible. Rates vary widely for new drivers at age 25.
Some insurance companies treat you like a brand new 17-year old driver, charging you the same rates you would pay as a teenage driver who just got a license. Other insurance companies charge slightly lower rates, giving 25-year old new drivers a break because of their age.
Best Car Insurance Companies for First Time Drivers Over 25
Certain companies are known for offering cheap rates to new drivers over age 25. Consider requesting a quote from all of the following companies to ensure you pay the lowest rates on car insurance:
- State Farm
- Liberty Mutual
Rates vary widely between states. GEICO tends to be the cheapest major car insurance company for all demographics nationwide, although other insurers could undercut GEICO in certain states. That’s why it’s important to compare quotes from multiple insurance companies – especially as a first-time driver over 25.
Final Word on Car Insurance for First Time Drivers Over Age 25
Ultimately, the rates you pay for car insurance as a new driver at age 25 vary widely.
Insurance companies treat you like a new driver, which means you pay higher insurance premiums. You don’t have enough driving experience to pay low car insurance rates. You may not have experience in all traffic or weather conditions. Statistically, you are more dangerous to insure than the average 25-year old driver, who typically has 5 to 9 years of insured driving experience.
You can’t change your age or driving record, but you can take advantage of insurance discounts. By taking advantage of discounts and shopping around for car insurance, you can pay the lowest possible premiums even as a new 25-year old driver.