I just turned 25. Shouldn’t my rates be much lower? 

A driver’s age is one of the biggest rating criteria that insurance companies look at. Younger drivers typically pay more, and older drivers (up until a certain point) will pay less. When you’re in your teens, your prices are usually the highest and may start to decline at around 25.  

But sometimes the difference isn’t as great as you might think. While most insurance providers will decrease rates as you get older, there are other factors at play—claims made, a change in address, and so much more. Let’s explore.  

Drivers under the age of 25 are statistically more likely to be involved in a collision or make a claim. However, 25 isn’t a “magic age”. Lower rates aren’t guaranteed for every driver, especially when you take into consideration everything else that could happen in the time it takes you to turn 25. 

That said, on average, 25-year-olds pay less for car insurance than younger drivers. You’ll see the most savings at 25 if you’ve remained claims-free, have had your license for as long as possible, and have not received any tickets from law enforcement. As long as all this is true, you’re likely to see much lower insurance rates at 25 than you would at age 17, 18, or even 20. 

To compare the difference, we ran auto insurance quotes for an 18-year-old driver and a 25-year-old driver. We elected to keep the coverage limits, marriage status, commute distance, and driving record of these profiles the same and then quoted the same drivers twice—one for when they’re 18 and have their full license, then again for when that driver is 25. We ran these quotes with the individual being listed as the principal driver; note that there will generally be more savings with a teenager being added as an occasional driver to a parents’ policy. 

We ran quotes with eight different insurance carriers and have listed the lowest, highest and average prices below.   

We used the following fictious drivers for the quotes we ran: 

*Note that the averages we derived for these drivers were from finding the median between 8 of our most popular carriers.

The examples above are all assuming that the individual’s circumstances haven’t changed. If everything were to stay the same, then yes—generally you could assume your rates would decrease substantially as you get older. But these quotes were all pulled at the same time. In nine years, a lot can change. Inflation, repair costs, and not to mention in this time you might have made a claim. Or two. Or three.  

Take Mary Anne as an example. She had the lowest difference in cost between 18-years-old and 25. Let’s take her profile at 25 and add on an at-fault claim and a speeding ticket. 

Now, her lowest rate quoted from the companies we used is $4,460 and her highest is $7,668, and her average rate comes out to $6,428. That’s only a $326 decrease from the rates she had at 18-years-old, and this doesn’t consider any industry shifts, inflation, etc., because—again—these quotes were all pulled at the same time. Age is just one of dozens of factors that insurers will consider. 

Turning 25 doesn’t automatically lower your rates. There are many reasons why your rates may not have decreased including having claims, tickets, a change in address, etc. Something that’s also beginning to emerge is that drivers between 25 and 35 are causing more accidents than people under the age of 25.  

According to Transport Canada’s National Collision Database, drivers between the ages of 25-34 are actually involved in the most reported accidents in the country. So, just because you’ve turned 25 doesn’t mean you’re on the positive side of the statistics. This could also be because there are more drivers in that age category; some young drivers may not have gotten their licenses yet or aren’t driving because they can’t afford a car. 

Rates are rising all over the country, too. Increases are being caused by multiple reasons and could potentially offset the decrease you might receive on turning 25 (if any, depending on your history). Realistically speaking, a driver who has been licensed since 16, with a clean record, could end up seeing their rates remain the same or even increase due to factors out of their control. This includes: 

And of course, there’s reasons why your rates may have stayed the same (or will still be expensive) at the age of 25 because of something else in your profile. This includes: 

These factors alone could cause you to pay more for your auto insurance. If you had a clean record at 21, lived in a safe neighbourhood, and had a modest level of coverage, you could have actually paid less than when you were 25, living in downtown Toronto with a few at-fault accidents on your record. 

All this is to say that age is one factor insurance companies look at, but it’s not the defining factor. Yes, it plays a role, but it won’t exactly override a bad driving history, inexperience, or traffic violations on your record. Different insurance companies will also always give you different quotes (even with the same information), so we recommend shopping around no matter what age you are.  

Because each insurance company has different statistics and claim data, they may weigh factors differently. One insurer may put a lot of weight on the gender of the driver, where another provider might focus on driving experience more intensely. This is one of the reasons why different insurance companies will give you different quotes, even with the same information, and it’s also why we always recommend shopping around with the help of a Mitch Insurance broker. There could always be a better deal, and the team at Mitch has the resources necessary to help you find the best bang for your buck. Plus, we’ll do it on your behalf, so you don’t even have to lift a finger.  

No matter what age you are, affordable insurance is always possible with Mitch. Our job is to find you a great deal regardless of your circumstances. We work with dozens of carriers all over the country, so we’re confident in our abilities to find you the right coverage at the best price possible. All you need to do is give us a call.