How does age affect the cost of car insurance?
How does age affect motor insurance rates?
Car insurance companies use many different rating factors when you apply for a quote, including information about the driver and their driving history, the car, and the use of the vehicle to set the price of your insurance.
For many of the factors, you have a choice. You can drive a car in a lower insurance group, add a named driver, or opt for a voluntary excess, which can reduce your premium. However, you can’t choose your age, and for the youngest and older age groups, age significantly affects the cost of your insurance premium.
Throughout the insurance industry, young drivers under 25 and older drivers over 75 pay higher premiums because, statistically, they are involved in more accidents and make more expensive claims more frequently than other age groups.
Percentage of car insurance cost relative to 18-20 Age Group
Age Group Percentage of Car Insurance Cost Relative to 18-20 Age Group
18 – 20 100%
21 – 25 85%
25 – 29 70%
70 – 74 25%
The above table gives a basic comparison of average percentage differences in car insurance costs across different age groups. It does not take into account the individual circumstances of the driver or car nor factor in any potential no-claims history.
Source: The Association of British Insurers (ABI) Age and motor insurance
How does age affect car insurance costs for drivers under 21?
It seems unfair that you’ve just passed your driving test and are hit with the highest insurance premiums of all age groups. Young drivers between the ages of 17 and 21, represent over half of all new drivers in the UK, are seen by car insurers as the riskiest age to insure because, despite accounting for less than 8% of all road users, they are involved in more than 20% of all car claims.
There is some good news for your second year in driving: if you have a claims-free first year, you can expect a big discount when you renew your policy. A no-claims bonus could save as much as 40% on your premium after only one year of driving.
How does age affect insurance premium rates for drivers under 25?
Young drivers between 22 and 25 with two or more years of driving experience without making any insurance claims should have a healthy no-claims discount and start to feel the benefits of lower premiums.
However, they’ll face high car insurance premiums as a new driver under 25 in their first year of driving and have not yet earned any no-claims discount. It is not until you reach 25 that premiums will drop significantly.
At what age does car insurance go down?
When you turn 25, you’ll have reached the magic age when car insurance starts to go down. Insurance rates should drop and continue getting cheaper as you age. However, the most significant drop by percentage comes when you qualify for your no-claims bonus.
Does age affect car insurance quotes for drivers aged 25-29?
Car insurance premiums start to get cheaper once you reach 25 because, at this age, insurers see you as less likely to have an accident and make a claim.
When you turn 25, your premium can typically drop by 25% or more. If you have a good driving record and have built up your no-claims discount, that’ll lower the price even more. Paying an extra fee to protect your no-claims discount becomes a viable option.
Car insurance in your 30s and 40s
The average cost of comprehensive cover drops by about 10% for drivers when they reach their thirties and 20% during their forties. A combination of more years of driving history and, according to stats, even less likelihood to claim on your insurance accounts for cheaper premiums than in your twenties.
Most people just accept the auto-renew price from their current insurance provider without looking elsewhere. Insurers rely on you not checking the new price to increase their profits. However, you’ll likely get a significantly lower price if you visit a comparison website to compare car insurance quotes.
Motor insurance rates in your 50s, 60s and early 70s
One bonus of turning 50 is that insurance providers now consider you among the safest age groups of drivers with the best driving history. Consequently, discounts could drop as much as 35% during your 50s and 60s.
Does car insurance increase at age 70? Not normally, but it does start rising when you reach the age of 75.
Does car insurance increase at age 75?
Once you hit 75 plus, statistics show that the cost of the average comprehensive policy starts to go up because, at this age, they tend to be in accidents more frequently and are at a higher risk of claiming on their policy. The price of insurance premiums starts to creep up and continues into your 80s
Will car insurance be more expensive if I have medical conditions?
Some insurance providers may charge a higher premium for drivers with particular conditions, while other insurers may not cover them at all.
If you develop a ‘notifiable’ medical condition or disability, you must tell the DVLA and car insurance company. Although you might expect these medical conditions to affect mainly older drivers, some, such as diabetes, can affect drivers of all ages.
Having one or more of these conditions does not necessarily mean you can’t continue to drive. However, you could have to pay more for your insurance or find a specialist insurer.
Do first-time drivers pay more for their insurance premiums?
Yes. New drivers, regardless of age group, will encounter higher car insurance if they have little driving experience and are at an increased risk of claiming on their policy.
Is car insurance more expensive for young people?
Because of their age, young drivers will have to pay significantly more for their car insurance. It does not matter how safety-conscious or competent they might be. Young drivers, especially those in their teens and very early twenties, can get hammered when they seek an insurance quote for the first time.
Insurance companies want to protect their profits and won’t knowingly sell a product at a loss. They keep very detailed statistics of accidents and claims on car insurance, and time and again, drivers in their teens and early twenties are the riskiest age group to insure.
Young drivers are also most affected by insurance prices in their first year of driving because they don’t have any no-claims discount. However, driving accident-free without any claims on your insurance for twelve months and your no-claims bonus kicks in at the beginning of year two of driving, this discount can be as much as 40%.
Is car insurance more expensive for new drivers?
Yes. New drivers, regardless of age group, will have to pay extra because their lack of driving history puts them at a higher risk of getting in an accident and making a claim on their policy.
Driving for anyone at any age is more expensive in your first year because you don’t get any no-claims bonus until you renew your insurance at the end of your first year of driving.
Is motor insurance cheaper for older people?
As long as you remain claim-free, car insurance premiums will decrease as you age. However, when you reach your 70s or 80s, premiums will likely begin to rise again.
Your safe driving experience and a healthy no-claim discount work to your advantage as you age, keeping your insurance premium cost down when you renew. However, like young drivers, statistically, your risk of claiming increases and your premium rises.
However, any increase in your insurance should be relatively small as older drivers tend to have safer driving habits – they are more likely to drive shorter distances, at less busy times and generally not as often as younger drivers.
Do you need to renew your licence when you reach 70?
Once you hit 70, You’ll need to renew your driving licence online at Gov.UK every three years. It’s a straightforward process. You apply online at Gov. UK and make a health declaration – there is no need to visit your GP, and the service is free.
- When you apply for a car insurance quote, you must give your age, which affects the cost of your premium.
- Depending on your age, it can reduce or increase the cost of your insurance.
- You must be honest. Not telling the truth about your age can invalidate your insurance.
- Car insurance companies use statistics about claims to predict the likelihood that drivers in different age groups will claim on their insurance in the future.