Does auto insurance go down after the first year?

You can see auto insurance go down after first year if you are able to earn a lower rate. Car insurance goes down at 25 for most drivers, but auto insurance will go down for new drivers as they show safe driving habits. You could get a car insurance decrease after the first year with discounts or by shopping around.

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent

UPDATED: Nov 10, 2021

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A Concise Overview

  • Auto insurance rates decrease over time, but they’re not likely to drop after the first year.
  • The standard decrease in auto insurance comes when you maintain your auto insurance policy for three years.
  • Consumers with excellent or good credit can receive cheaper auto insurance rates.

Does auto insurance go down after the first year? It depends on your age, the vehicle you drive, the auto insurance company you’re with, and how long you had your auto insurance policy.

Car insurance can decrease over time due to several factors that we’ll explore here. Does car insurance go down after the first year automatically? Continue reading to learn about how to buy auto insurance with rates that go down after the first year.

If your car insurance hasn’t decreased over time, consider another auto insurance provider. Start your search with our FREE comparison tool by entering your ZIP code above to find car insurance that is cheaper after your first year.

Does your auto insurance go down after the first year?

Car insurance rates decrease over time, but it’s not likely yours will drop after the first year. Does car insurance go down after three years? The standard decrease in auto insurance comes when you maintain your auto insurance policy for three years.

Why doesn’t car insurance go down after the first year? Auto insurance companies are still assessing your level of risk. They want to see if you’re a safe driver with a clean driving record.

Auto insurance companies look back at the last three years of your driving record. They wait another three years to see if you can maintain your driving record before issuing a decrease.

This can come in the form of a loyalty discount, which we’ll talk more about in the following sections.

How much will my car insurance go down after the first year?

Auto insurance decreases depend on the company’s policies. If you happen to reach a specific age, you may be eligible for lower auto insurance rates. Improvements in credit history within a year can also decrease auto insurance rates.

According to the Federal Trade Commission, consumers with excellent or good credit can receive cheaper car insurance rates. This is because auto insurance companies believe consumers with good credit are less likely to file a claim.

How much does auto insurance go down after the first year with no claims?

Three years is the standard before you start seeing an auto insurance decrease. Teen drivers and young adults will see decreases in auto insurance as they get older.

Parents who have teens and young adults on their auto insurance policy will gradually save money on auto insurance as their kids age. Combined with discounts, you’re likely to save hundreds more each year.

A loyalty discount may be the workaround to the three-year standard.

Then again, a car insurance company’s loyalty discount may require three years of consistent coverage.

Does auto insurance go down after six months?

Some auto insurance companies don’t offer 12-month policies but instead offer six-month auto insurance policies. Does car insurance go down after six months? On the contrary, auto insurance often increases after six months.

Auto insurance companies often have promotional periods for auto insurance. Once that period has lapsed, you could face more expensive rates. Also, you still need to wait a year or two to be eligible for much lower auto insurance rates.

Does auto insurance go down as the vehicle gets older?

Your vehicle is another factor in what you pay for auto insurance. The Manufacturer Suggested Retail Price (MSRP) on a car depreciates when you drive it off the lot.

As miles accumulate and the vehicle gets older, it will cost less to insure the car.

For example, for a 2016 Chevrolet Impala, auto insurance costs $1,302 per year. When the vehicle was first released, the auto insurance rate was probably $320 more. The parts for the car will cost less, and the value of the car has depreciated since its release.

If you’re buying a used car, get cheap car insurance quotes from our FREE comparison tool. Just enter your ZIP code below.


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How age affects auto insurance from different companies

Age, gender, and marital status are common factors that affect your auto insurance rates. Auto insurance companies know that age generally translates into a driver’s experience level behind the wheel.

Gender and marital status are also viewed as significant factors in a driver’s risk profile.

The top auto insurance companies offer competitive rates based on age factors. It can get tricky if you look at rates from state to state. In this section, we’ll go over how age affects auto insurance.

Does auto insurance go down at 18 years old?

Before we go into details about auto insurance for 18-year-old drivers, watch this video on how parents can save money on teen auto insurance.

Car insurance has a slight decrease from 17 years old to 18 years old. The small change in age will make the teen driver eligible to acquire an auto insurance policy for themselves, but it would be costly for the teen driver.

How much does car insurance go down after 21? Auto insurance for a 21-year-old driver will be cheaper than an 18-year-old driver, but it’s still more expensive than auto insurance for a policyholder who is 25 and older.

Does auto insurance go down at 25 years old?

Car insurance decreases vary. If you’re a teenager or still in college, your auto insurance rates will be expensive. At 25 years old, however, your car insurance policy will be cheaper.

How much does car insurance go down at 25? Auto insurance rates decrease once you turn 25 years old. Statistically, you’re less likely to get into an accident.

According to the Center for Disease Control (CDC), fatal car crashes are the leading cause of teen deaths in the United States. Teens and young adults under 25 are more likely to file a claim or get into an accident.

Let’s look at the average car insurance rates by age, gender, and marital status from the top companies in the United States.

Average Annual Auto Insurance Rates by Age, Gender, and Marital Status
CompaniesSingle 17-Year-Old Female RatesSingle 17-Year-Old Male RatesSingle 25-Year-Old Female RatesSingle 25-Year-Old Male RatesMarried 35-Year-Old Female RatesMarried 35-Year-Old Male RatesMarried 60-Year-Old Female RatesMarried 60-Year-Old Male Rates
State Farm$5,954$7,324$2,336$2,555$2,082$2,082$1,874$1,874
American Family$5,997$8,131$2,289$2,695$2,203$2,224$1,993$2,014
Liberty Mutual$11,621$13,719$3,960$4,503$3,803$3,857$3,445$3,681
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There’s a massive difference in auto insurance cost from teen to adult. Single drivers appear to pay more for auto insurance, also. Senior drivers — those aged 60 and older — pay the least for auto insurance.

Does USAA auto insurance go down at 25 years old?

As shown in the USAA car insurance rates above, 25-year-old drivers pay almost $4,000 less for USAA. The full coverage auto insurance rates can be even cheaper when discounts are added.

USAA auto insurance is only available to members of the U.S. Armed Forces and their immediate families. Both active and retired members of the military are eligible for USAA insurance policies.

When does State Farm auto insurance go down?

For teen drivers, State Farm auto insurance will decrease as they get older, just like with other companies. You’ll have to continue your State Farm auto insurance policy for three years or more to get the loyalty discount.

The loyalty discount will lower your auto insurance rates and give you perks only assigned to returning customers.

You won’t be able to get State Farm loyalty discounts after one year. Be sure to keep a clean driving record and maintain good credit to make it easier to get your savings.

Does Geico auto insurance go down after six months?

Geico car insurance only offers six-month auto insurance policies. Your Geico auto insurance policy could go up after six months. If you’ve managed to get through your policy without making a claim, you could be eligible for an auto insurance discount.

If you keep your Geico auto insurance for three years or more, you could get a loyalty discount.

Loyalty discounts often come with accident forgiveness.

Some auto insurance companies will offer small accident forgiveness when you sign up, which is protection against fender bender claims.  Small accident forgiveness will prevent your rates from going up if you have a fender bender, while large accident forgiveness is a perk that prevents an increase in rates after a major accident.

Does Geico car insurance go down at 25? Absolutely! Geico is one of the cheapest companies in the United States. Your car insurance rates could go down by thousands, depending on the discounts you have.

See what auto insurance companies offer discounts in your area by entering your ZIP code in the FREE comparison tool.


When does auto insurance go down after the accident?

Remember how we talked about auto insurance companies looking back three years on your driving record? That’s the same amount of time it takes for auto insurance to decrease.

If you’ve been in an accident in the past three years, your auto insurance will be more expensive than average. It can take up to five years before you start to see car insurance rates decrease after an accident.

Get car insurance quotes using our FREE comparison tool. Just enter your ZIP code to get started.


Frequently Asked Questions: Does auto insurance go down after the first year?

Now that you know how car insurance rates decrease over time, let’s go over a few frequently asked questions. These questions appear on search engines across the internet.

If your car insurance doesn’t decrease over time, look for another auto insurance company. Start with our FREE comparison tool by entering your ZIP code below.

#1 – Does auto insurance go down over time?

Yes. Your car insurance rates will go down over time. The price of your auto insurance policies will decrease as you get older. This is helpful if you have teen drivers on your policy. Also, you may start to receive discounts for consistently enrolling with the same company for three to five years.

#2 – How long does it take for your auto insurance to go down?

It takes about three years for an auto insurance company to give you a loyalty discount, which decreases your rates and adds perks to your policy, such as accident forgiveness.

#3 – Why did my auto insurance go down?

Your auto insurance may have come down due to discounts that weren’t listed during the quote process. Car insurance companies will review your credit score and driving record to determine risk. Also, if you’ve been with the company for three years or more, you may have established yourself as a low-risk driver.

#4 – How much does auto insurance go down after a year?

Although you wouldn’t see a dramatic decrease, your auto insurance could drop if your credit improves, your vehicle value depreciates, or you reach an age threshold.

#5 – How can you lower your auto insurance?

The best way to lower auto insurance is through discounts. As car insurance companies check factors that determine auto insurance rates, they should evaluate your eligibility for discounts. The more discounts you have, the cheaper your auto insurance rates.

#6 – How often does auto insurance go down?

Auto insurance doesn’t decrease much. You’re likely to encounter an increase before you receive a decrease in auto insurance rates.

#7 – When does insurance go down for new drivers?

New drivers will start to see auto insurance decrease as they get older. New adult drivers will have cheaper rates and won’t see a major drop until they’re older or married.




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