When do car insurance rates go down?

When does car insurance go down?

Car insurance go down when your insurer sees reduced risk, or you qualify for a lower price due to discounts or policy changes. Common reasons include gaining driving experience, keeping a clean record, driving fewer miles, choosing a cheaper-to-insure car, increasing your deductible or earning a discount. Switching insurers can also lower your rate.

While it seems like car insurance rates are always going up, there are plenty of reasons you could see a more affordable rate.

16 reasons your auto insurance could get cheaper

Your car insurance may get cheaper because of changes you make or changes that happen over time. Some savings require action, such as comparing quotes or raising your deductible. Others occur as you gain driving experience, or when old violations no longer affect your rate.

1. You shopped around and switched car insurance companies

Shop for better auto insurance rates

Your car insurance rate will drop simply by switching to an insurer with a lower premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods.. Every company uses its own formula to calculate risk and pricing. That means two insurers can look at the same driver, same car, and same record—and quote very different prices. Some companies focus more on driving history, while others weigh mileage, credit, or location.

Periodically shopping around for the best deal on car insurance is a great way to pay less. Today, it’s easy to compare quotes online. Just make sure you choose a reputable company and adequate coverage.

2. You increased your deductible

Your deductible is the amount you have to pay before your insurance kicks in – typically $500-$1,000. Though you’d probably prefer to pay as little out-of-pocket as possible following an accident, raising your deductible can lower your auto insurance premium because you share more financial risk with your insurer.

Just be sure that if you do increase your deductible, it’s not so high that you wouldn’t be able to afford it if bad luck did strike. A few years with a higher deductible and no accident and you could save more than the deductible would cost.

3. You installed an anti-theft device

Anti theft device

Car insurance companies are happy to provide discounts to customers who take steps to lower their risk as drivers. One way to do that is by installing devices that can deter thieves or make your car easier to recover if it is stolen, such as a car alarm or GPS tracking.

In fact, you could get anywhere from 5% to 30% off your comprehensive coverage policy for installing these types of devices.

4. You've reduced your coverage

One easy way to save money on car insurance is by downgrading your coverage. Of course, you don’t want to put yourself at risk by becoming underinsured, so make sure it's the right move. If you have an older vehicle that’s paid off, dropping down to liability coverage only could be a smart financial move.

To know for sure, find out its actual cash valueActual Cash Value (ACV) is the current market value of your car, considering depreciation. It's the amount your insurance will pay if your car is totaled or stolen. (ACV) and determine if potentially losing that amount in a total loss is worth the monthly savings on your premium.

5. You've cleaned up your record and earned a good driver discount

Your rate will go down once older tickets or accidents no longer affect your record. Most violations impact pricing for three to five years.

Accidents, tickets and claims will jack up your rate – in most cases, for at least a few years.

"Minor violations will factor into your insurance rate for three years, while major violations can impact your premium for five to 10 years," says Tom Santamorena with Westlake Risk and Insurance Services.

How long does car insurance go down after one year with no claims? Maybe a little. But the more time that has passed since the infraction or claim, the better off you are.

Having no accidents within the past three to five years nets a car insurance discount of 26%, on average.

6. You had a birthday

Women's Birthday

Your age impacts what you pay. So at what age does car insurance go down? While most of us think of 25 as the magic number for car insurance rates, the truth is that as long as a young driver keeps a clean record, most companies will drop rates a little bit every year before then.

In most states, gender also impacts rates. So when does car insurance go down for males and when does car insurance go down for females? It's around the same age; however, rates for males are generally higher, so the decrease might not be as obvious.

7. You got married

Getting married can sometimes lower your car insurance rate because, statistically, married drivers are seen as more stable and lower-risk than single drivers. This is not guaranteed, but it is a common pricing factor in many states. Married people also tend to buckle up more often and obey the rules of the road.

Some savings come as you combine policies and get multi-car insurance. However, even you marry a spouse who doesn’t drive, your rates can still drop dramatically – about 10% on average.

8. You downsized your vehicle

Maybe you no longer need to drive your kids to school and soccer practice, or the rising cost of gas has you rethinking your SUV. Downsizing your vehicle to something less expensive and more fuel-efficient can save you money in many ways, including on insurance. If the value of your car isn’t quite as high, you don’t need to pay for as much coverage.

9. You qualify for group insurance

If you belong to a certain club, work for a certain employer or have another affiliation, you might qualify for an insurance discount through group car insurance. For example, members of AAA can qualify for discounted insurance rates through many insurers. Ask your car insurance company what types of affinity group discounts it offers.

10. You paid your premium in full

Setting up your car insurance premium to be billed monthly might be easier to budget, but if you can afford to pay a larger chunk at a time, it could save you money. For example, if you opt to pay your premium in full every six months, you could save around 9%.

11. You've earned senior citizen status (and discounts)

A man playing with a dog

Some insurers offer discounts to older drivers who complete an approved defensive driving or mature driver safety course. These programs are designed to refresh driving skills and improve road safety awareness. These discounts are required by law in some states; ask about approved courses.

12. You improved your credit

If you had no credit or bad credit, an increase in your credit score can definitely lower your rate. Some states don't allow insurers to use credit scores to determine rates. "If your state does allow it, the savings can be big, as much as 10% to 15%," says Santamorena.

13. You don't commute anymore.

Taking a job working form home or taking the bus to work will allow you to switch your car from commuting to “pleasure use only.” On average, nationwide, giving up commuting drops premiums about 2%. Hardly impressive, but every dollar helps.

14. You bought a house

Buy a house

Insurers consider homeowners more stable than renters, so insurance is cheaper if you own a home, regardless of whether you insure your home with them or not. The discount amount will vary; nationally, it averages about 1.6%.

More serious savings come from bundling your home and auto insurance. The savings typically are reflected in your car insurance bill. Nationally, savings average about 8%.

15. You moved to a small town or rural area

If you decide to ditch the big city for a town with more space and fewer people, it could benefit your car insurance rate, too. Outside of your own driving record, few things have more impact on car insurance than your ZIP code. Less population density typically means fewer accidents.

16. You bought a new car

Trading in that sporty Audi for a Toyota Sienna? The vehicle you drive is one of the biggest factors when computing your rate. However, your claims rate affects your rates more than the actual car. You'll get a higher rate if your car model gets into more accidents -- even if you have a perfect driving record. Other drivers of your vehicle influence how an insurer gauges risk.

A minivan pretty much checks all the right boxes. However, some models driven by older people, like a Corvette, can be comparatively cheap to insure.

What makes car insurance rates go down?

Your car insurance rate goes down when your risk profile improves or when you actively reduce your coverage costs. That happens when you drive safely over time, avoid tickets and accidents, drive fewer miles, improve your credit (in states where it applies), choose a higher deductible, or switch to a cheaper insurer.

Rates are recalculated at every renewal, so you might not see changes right away.

Does car insurance go down after 6 months?

Yes, it can go down after six months. Most car insurance policies renew every six months. If something has changed in that time period to improve your rates, you might see a reduction.

Does car insurance go down after one year with no claims?

A claim-free year helps, but it does not guarantee a lower rate. You are building a safer profile, which is good, but most insurers require multiple years of clean driving before offering their largest “safe driver” savings. In many cases, you will see small improvements first, then larger discounts after three to five years without accidents or major violations.

How long does it take for car insurance to go down for new drivers?

New drivers should see at least a small increase in rates for every year of experience. As long as the driver doesn't have any tickets or accidents, rates should decrease slowly but steadily. Of course, factors other than age can affect rates, so if you see an increase instead, ask your insurance company why.

How often does insurance go down?

There's no set frequency for insurance rates to go down. Rates are reviewed at every renewal, and anything that has changed in that time will affect what you pay. That could mean a decrease or an increase, depending on what has changed.

When is the best time to shop for car insurance?

The best time to shop for car insurance is whenever something in your life changes or your rate goes up. That includes moving, buying or selling a car, adding or removing a driver, getting a ticket, or noticing a big price increase at renewal.

In addition to the events we listed above, there are a couple of other good times to shop around:

Your kid goes to college -- If your kid heads off to a college that is at least 100 miles away and doesn't take a car with him, your rate should drop. Some insurers discount your rate by up to 10%.

You move to another state -- State laws and different claims frequencies mean some cities will be much, much cheaper than others. A bad driver in Portland, ME, will probably pay less than a good driver in, say, Louisiana.

FAQ: Reducing car insurance rates

Can you negotiate car insurance rates?

No, you cannot negotiate car insurance rates. Car insurance rates are set in advance and regulated, so it’s not possible to negotiate a different amount. However, that doesn’t mean you can’t find a better rate elsewhere. Each insurer has a range of rates it offers based on a driver’s profile, such as age, driving record, and vehicle. That means auto insurance rates vary by company. So, by shopping around for quotes from different insurers, you can hopefully find a policy that matches your budget.

How long does it take for car insurance to go down?

That depends on your previous driving record and whether you have any at-fault incidents to your name. In general, car insurance companies only consider the past three to five years of your driving history. So, while accidents won’t necessarily be removed from your record, they probably won’t factor into your rate after that length of time.

How can I lower my car insurance after an accident?

After an accident, you can lower your costs by comparing quotes from other insurers, keeping a clean driving record going forward, increasing your deductible, or reviewing discounts you may qualify for. Different companies treat accidents differently, so shopping around is especially important.

Why did my car insurance go down?

Your rate may have dropped because your driving record improved, a ticket aged off, you qualified for a new discount, you reduced mileage, or your insurer updated its pricing. Sometimes it is also due to company-wide rate adjustments that work in your favor.

Why isn't my car insurance going down?

Auto insurance rates are affected by a lot of factors. In recent years, there has been a general increase in rates in most places due to increased repair costs and severe weather. There is no guarantee that anyone's rates will go down, but if you feel you're due for a decrease, talk to your insurance company.