Does car insurance go down after the first year? (New Data + Male/Female)

Car insurance rates may go down after the first year if you maintain a clean driving record and take advantage of available discounts. Car insurance is expensive for teen drivers because they pose a higher risk. Learn how to save.

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UPDATED: Jun 6, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 6, 2022Fact Checked

Here's what you need to know...

  • If you have very little driving experience, your insurance rates will likely be high
  • With each year of driving experience as a new driver, your rates will likely reduce as long as you maintain a good driving record
  • You can further reduce your car insurance rates by taking advantage of behavioral and loyalty-based discounts

Being an inexperienced driver can be rough on your wallet when it comes to insurance. No insurance company is willing to trust you to be careful, which means it will cost you to get coverage.

If you are approaching the end of your first year as an insured driver, you may start to wonder, “Does car insurance go down after the first year?” Ideally, it does.

Depending on when you started driving, your auto insurance rates may go down a little after the first year. However, if you have a terrible driving record, you won’t get lower rates, and may actually end up paying more. Keep reading to learn what other factors can affect your car insurance rates.

Will my car insurance rates go down after the first year?

Your auto insurance is likely to go down after the first year, especially when you’re a new, young driver. However, car insurance rates depend on age and gender, and these factors will also impact how much your rates will drop.

Typically, you will be expected to pay an average of $351 per month for car insurance at 16 years old if you are male. But after the first year, this drops an average of $29 per month. On the other hand, if you are a female driver, you will pay $328 monthly at 16 years old. After the first year, you’ll pay $24 less each month on average.

As a young driver, your rates should improve each year as long as you maintain a good driving record. However, these changes will eventually taper off as you get older.

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When does car insurance go down?

If your car insurance rates are high, that doesn’t mean they have to stay that way. Car insurance rates can drop for several reasons, including your age, driving history, and more.

When You Grow Older

At what age does car insurance go down? Research shows that teenage drivers and young adults under 25 are more likely to get involved in accidents than middle-aged drivers. Also, teenage males pay more for car insurance because, statistically, they get in more accidents than their female counterparts.

So, if you are within this age range, you will have a problem getting cheap car insurance because many companies consider you a huge risk to insure. As a result, they usually charge higher rates. 

Your gender will also affect your insurance rates differently at various age ranges. For example, at age 18, a male will pay an average of $260 per month for insurance, while a woman will pay $242. At age 19, the same male will pay $181, while a woman will pay $189.

However, with each year you gain more driving experience, you’re less likely to cause accidents. Once you reach age 25, you will typically see a significant drop in insurance rates if you have a good driving record.

When You Maintain a Clean Driving Record

Regardless of gender or age, your driving record plays a significant role in calculating your car insurance rates. The more violations you have, the more money you will have to pay for coverage. That said, female drivers tend to have better driving records and fewer violations than males.

Usually, insurance companies investigate your driving behavior by checking your CLUE report, which shows the claims you’ve made against your car insurance. Having claims on your report implies you are more likely to get involved in another accident and cost insurers money, and they will charge you higher rates.

To increase your chances of getting reduced insurance rates after the first year, you should keep your driving record clean. Having violations on your record, such as tickets, may increase your insurance rates by 17%.

When You Get Behavioral And Loyalty-Based Discounts

One way to maintain a good driving record and enjoy insurance discounts is by taking a defensive driving course, which may qualify you for a driver’s education course discount. Both these courses will teach you how to drive better and follow road regulations.

Many insurance companies will reduce your premiums when you complete these courses because they’ll see you as less of a risk to insure. As a result, you may end up paying 5% to 10% less.

You may also qualify for a low-mileage discount if you drive fewer miles than what’s specified in your policy. Each insurance company will determine what the set miles are. But you can save as much as 30% on insurance costs if you drive under 40 miles each day.

If you are an excellent student, you may also end up paying less for auto insurance. So, ask your insurance company if it offers discounts for students on the honor roll. You could end up paying as much as 20% less on your rates. Even if your grades don’t qualify you for discounts, you could still save up to $350 annually by driving less when you’re away at college.

Loyalty also pays. If you renew your policy early, you can take advantage of the early renewal discount that some insurance companies offer to retain customers.

You Can Lower Insurance Rates After the First Year

Ideally, your insurance rates should go down each year as you gain more driving experience and lower your chances of getting into an accident. You can also reduce your car insurance rates significantly by taking a safety driving course, maintaining a clean driving record, and asking for all available discounts.

If you aren’t happy with the insurance coverage you have, you can always shop around and compare prices. That way, you can choose the insurance company that will cover you at affordable rates for your second year.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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