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Things to Know:
- Car insurance for new drivers over 25 years old is more expensive due to inexperience
- As long as you keep a clean record, your rates will go down
- There are discounts available to new drivers to help save money
- The average car insurance rates for new drivers over 25 is $125.14/month and $1,501.69/year.
So, you’re considering getting your license. Maybe you’re a little late to the game, but you’re well on your way to being on the road. Car insurance for first-time drivers over 25 is attainable, but expect higher premiums.
You may ask yourself if you’re at risk of being taken advantage of by insurance companies because you’re newer to driving than your peers. Nobody wants to pay too much, and you won’t have to. Together, let’s find out how you can avoid paying more than is necessary.
Understanding how car insurance premiums are calculated can be tricky — especially for a new driver. Together, we will go through just what you should expect as an older first-time driver and how you can get the cheapest rates.
Don’t overpay for the coverage you need. Before jumping into this post about car insurance for new drivers over 25, compare quotes today to find the best rate for your car insurance.
How much experience do you need for your rates to go down?
When you’re young and you’re trying to see the light at the end of the tunnel, most agents tell you that your rates will go down dramatically at 25.
It’s not because 25 is the magic age, it’s because the biggest drop occurs after you have nine years of driving experience. If you’re licensed at 16, the magic age would be 25.
Safe driving is the cheapest way to insure a new driver. As it stands, an individual must prove themselves to be a safe driver.
Before we get into the downward trajectory of premium costs, let’s look at averages for different age demographics with a table showing rates in Virginia (also, see the chart above which shows average rates from Geico for ages compared against the national average by age).
|Driver Marital Status, Age, & Gender||USAA||Progressive||State Farm||Nationwide||Geico||Allstate|
|Married 60-Year-Old Female||$1,043.95||$1,132.78||$1,254.98||$1,272.72||$1,398.20||$2,031.96|
|Married 60-Year-Old Male||$1,050.74||$1,136.43||$1,254.98||$1,307.89||$1,398.20||$2,031.96|
|Married 35-Year-Old Male||$1,099.39||$1,191.17||$1,391.16||$1,443.10||$1,470.60||$1,927.39|
|Married 35-Year-Old Female||$1,116.18||$1,253.97||$1,391.16||$1,434.40||$1,474.02||$2,042.71|
|Single 25-Year-Old Female||$1,436.42||$1,518.75||$1,572.89||$1,582.01||$1,714.05||$2,657.43|
|Single 25-Year-Old Male||$1,578.62||$1,551.92||$1,810.26||$1,722.41||$1,694.63||$2,658.75|
|Single 17-Year-Old Female||$3,443.74||$5,745.36||$4,201.32||$3,416.59||$3,138.15||$6,396.46|
|Single 17-Year-Old Male||$4,098.09||$6,458.02||$5,274.60||$4,404.98||$4,204.21||$7,347.87|
As you can see, the top one and two spots for the highest rates go to “single 17-year-old males” and “single 17-year-old females,” respectively.
You’ll start to see your rates go down as a first-time driver after you get three years of experience. As long as you keep your record free and clear of accidents, you’ll start to qualify for some money-saving discounts. How long does a car accident stay on your insurance? It’s all about extended periods of safe driving.
You might even qualify for a standard rate once you’ve held a license for three years. Even better, your rates aren’t done dropping once you hit that nine-year mark of experience. Statistically, the lowest rates one ever pays usually comes around age 60.
There are other factors that can decrease your rate as well. For one, marriage. Marital status is a significant factor for insurers, nearly as much so as to age and gender — though keep in mind, many states are phasing out the latter two as acceptable factors for rate determination.
The reason why they look at marital status is relatively simple — it boils down to perceived responsibility.
It stands to reason that a married person has more to lose in an accident: Financial stability, the ability to support their spouse, or, goodness forbid, having their spouse actually in the vehicle during an accident.
What discounts will you get as you gain experience?
When you’re an older first-time driver, you won’t be eligible for any discounts pertaining to driving experience until at least three years.
After you’ve hit the three-year mark and your renewal comes up, you should look for some of all of these car insurance discounts and policy endorsements:
- Good Driver Discount – applied when you have no more than one ticket or accident within the last three years
- Safe Driver or Accident-Free Discount – applied when you’ve gone three years without having an at-fault accident
- Accident Forgiveness – you may be eligible for accident forgiveness after going a specified number of years without an accident while insured through some carriers
- Disappearing Deductible – you may be eligible for a lowered deductible as you go years without filing a claim through your carrier.
Let’s move onto whether or not driving in another country counts as experience in the United States.
Insurance Rates Aren’t Based Solely on Age
Not everyone jumps at the opportunity to get their driver’s license when they turn 16. The process of learning how to drive is the same for teens as it is for older adults, but getting a license older in age is typically easier because there are fewer steps.
The fact that you’re newly licensed could work against you if you’re on a limited budget. Here’s what you should know before you start shopping around: It is all about experience.
A lot of people think that rates for teens are high solely because they’re young and are more likely to be negatively influenced while they are driving. While young minds do tend to be more impressionable, and this does have some bearing on insurance rates, that’s not the only reason insurance rates for teens are high.
Insurance rates for teens are primarily high because they are all inexperienced drivers.
In fact, in some states like California, age can’t even be considered when rating any driver. It’s the fact that teens have just learned to drive and just earned their license that they’re such a risk.
Being inexperienced poses unique risks to the insurer regardless of the driver’s age. This is why first-time driver insurance costs are so much higher than someone who has been driving for a few years. Driving records are like credit scores, there’s a proving ground to traverse. In fact, credit scores are also a factor in regards to determining rates.
But, before we look into credit scores, let us take a look at how your driving record can affect your rate. The following table contains information for top insurance companies.
|Companies||Clean Driving Record||One Speeding Citation||One Accident||One DUI|
As you can see, each company’s average rates are affected by a blemish on one’s driving records, particularly when it comes to having a DUI. Let’s now take a look at how your credit score can affect your rate. This table shows rates in Virginia, for the sake of simplicity.
|Companies||Good Credit History||Fair Credit History||Poor Credit History|
As you can see, a poor credit score can make your rates skyrocket. According to Experian, a poor credit score is under 579. potential positive factor for older new drivers is they’ve had a chance to build up a solid credit score.
Not unlike one’s credit score, age is just one of many factors that insurers utilize in rate determination, according to the NAIC. This is why cheap car insurance for new drivers under 21 is so hard to come by. Car insurance for new drivers over 21 is essentially the same as for those who begin driving at age 16.
The key is experience, that is how one lowers the insurance for first-time drivers over 21.
Furthermore, no matter what one’s age, should they be a first-time driver, they’ll need to show the DMV documents to prove identity, legal presence, state residency, and social security number.
Insurers are looking for responsibility and the ability to build up a clean driving record. At this stage, it is predetermined that their experience is limited, thus making them “high-risk.” Insurance companies use the term high-risk driver to describe someone who pays more for coverage than the average individual. When that term is used, it is referring to someone who is statistically more likely than other drivers to get into an accident because of their experience, history, or demographic.
High-risk drivers pay more than standard or preferred drivers.
This video briefly explains just what a high-risk driver is and ways you can possibly lower your car insurance rates.
You may be asking yourself, “I’ve done nothing wrong, how am I high-risk?”
Let’s move on to how a lack of experience, as unfair as it may seem, really does label you as a high risk.
Why are inexperienced drivers called high-risk drivers?
How much is car insurance for a new driver over 25? There is no set amount, but insurance for a first-time driver over 25 is going to be relatively inflated until the new driver proves themself. This shows how experience is a greater factor than age.
It’s easy to see why a company would classify someone who’s had several at-fault accidents as a high risk, but you might wonder why someone without much experience is classified the same way. You have to consider what it means to be inexperienced when you’re operating a car. A lot of studies have been conducted that focus on licensing experience and accident trends. When you are first issued a license, you’re not as confident of a driver as you are after commuting for years.
This lack of confidence is reflected in the fact that new drivers have more accidents than experienced drivers.
Another factor that justifies inexperienced drivers automatically falling into a high-risk class is that there’s nothing an insurer can reference to effectively prove the person is a safe driver.
The following video shows how long one may be considered a high-risk driver. In particular, those with a DUI on their record.
Experienced drivers have a licensing history and claim history insurers can reference. The driver must prove themselves by establishing a good history. Do car insurance companies do background checks? In short, yes.
Every driver has this period of high-risk, and it is prudent that they exhibit extra caution during their early time as a driver. Teens are statistically more likely to be in this category because most teens begin driving around the same time.
While the situation is not verbatim for, say a 25-year-old, new driver, they still have this initial period where the insurance company is unfamiliar with their skill level.
Keep in mind that insurance companies analyze risk and when there is no information available in regards to driving history, they too must exhibit caution. Hence, the higher rates.
Will experience driving in another country count?
If you’re an older first-time driver in the United States, but you’ve been licensed before in other states, the experience could carry over. It all depends on where you’re buying insurance and where you were licensed. Some countries will give translated records which are helpful.
If you can provide a driving abstract that shows when the license was issued and if you’ve had infractions, there’s a good chance that you’ll be giving experience credit. You have to ask your agent, but you may be able to find lower-cost rates as a new driver.
Buying Your First Car & Insurance Rates
If you’ve been licensed but have yet to own a car, it could affect your premiums as well. You’ll get the driving experience credits, but you won’t get credits for having insurance in your own name. This means that you won’t get money-saving insurance history discounts.
Getting a license as an adult is a lot easier than getting a license as a teen, but that doesn’t mean that you should assume you’ll pay less for insurance, or you won’t have to go through similar steps to get the license if you’re an older first-time driver.
Even if you are above the age of 18, you will need to pass the written test. With that being said, you will not need to get a learner’s permit. Thus, you will not need to pay for a learner’s permit like a minor would.
A simple way to offset the above-average insurance rate is to look into purchasing a used car.
Utilizing information from the Insurance Institute for Highway Safety, there are a few safe and popular vehicles you could choose from. What car has the cheapest insurance for a first-time driver that is also safe?
The Honda Civic, for one, is a notoriously safe vehicle. Because insurance companies are in the business of analyzing risk, and they see new drivers logistically as risks, having a safe vehicle may become a financial ally. Plus, there’s a fine chance that you can get one for $7,000 to $10,000 or so.
Another option would be the Toyota RAV4, which can be purchased used for around $12,000. Keep in mind, too, that even safe vehicles can be upgraded. Meaning, insurance companies look for the presence of car safety features that will help you save on car insurance.
Being older doesn’t always mean you’re wiser. Age usually equates to life experience, but not always.
If you’ve waited to get your license, you could wind up paying similar rates as young adults for your first insurance policy.
It is also important to obtain all of your prospective vehicle’s history. Has it had many previous owners? Has it been involved in an accident? If so, how severe?
Just make sure the vehicle you plan on buying is safe and has a commensurate history. Chances are your insurance company will take note of your desire for safety, and before long you’ll be on the road, rightly seen as a low-risk driver.
To find out what the best car insurance for a first-time driver is, you’ll need to comparison shop. To find the cheapest car insurance, get discounts and shop around online to compare the rates through all of the best carriers. Now that you’ve finished reading about car insurance for first-time drivers over 25, use our free comparison tool today.
Frequently Asked Questions: Insurance for First-Time Drivers Over 25
We hope we’ve answered all your questions, but if you have more, see below for some frequently asked questions regarding insurance for first-time drivers over 25.
#1 – What car has the cheapest insurance for a first-time driver?
The Subaru Outback is an option at an average annual insurance premium of $1,430.
#2 – What is the best car insurance for a first-time driver?
Erie Insurance was called the best overall car insurance for teens & young adults in 2020.
#3 – What is the cheapest way to insure a new driver?
Take advantage of good student discounts, install anti-theft devices, and take a defensive driving class.
#4 – How much is car insurance for a new driver over 25?
The average cost of car insurance for a 25-year-old is about $3,200 annually. It is dependent on how long the driver has been behind the wheel.
#5 – How much is insurance for a first-time driver over 25?
A standard six-month policy for a 25-year-old is $885. This, however, is for a driver with experience, so for a first-time driver it would be higher.