Does auto insurance go down after the first year?

If you’re a new driver or just signed up with a new insurance provider, you might be wondering when the cost of your auto insurance coverages will go down.

Generally, auto insurance rates stay the same at the next policy renewal, even if you’re a safe driver with an accident-free record. Most insurance companies want to see a few years of safe driving before lowering rates. However, you could see a decrease if you earn discounts.

Read on to learn more about auto insurance rate decreases and when you can expect an increase in auto insurance rates. We’ll also cover how to reduce your auto insurance rates.

When Auto Insurance Rates Might Go Down After the First Year 

When does car insurance go down? If you’ve been driving for a while and have never been in an accident, you may be able to secure a slight decrease in rates after your first year with a new insurance company. However, most companies won’t reduce rates after the first year.

If you signed up with a safe driving program, you might be able to secure a discount after the first policy renewal. You may also see rates decrease if your insurance company bases rates on your credit score and you’ve greatly improved your credit within a year.

When shopping for an insurance company, ensure you look beforehand at car insurance company reviews to see if they offer perks for new drivers or new signees  like Geico — to help you save after your first year of auto insurance. (For more information, read our “How long does an auto insurance policy last?“).

When Auto Insurance Rates Could Increase 

Most insurers wait a few years before reducing your rates. So if you’re a new driver or just switched companies, be patient and keep a clean driving record. Safe driving will go a long way in reducing your car insurance rates in a few years.

However, in some unfortunate cases, your car insurance rates could go up after your first year. Generally, your insurance rates will go up for the following reasons: 

• Accident. If you’re at fault for an accident, your insurance company will increase your rates unless the insurance company has accident forgiveness. 
• Change in address. Moving to a different address can increase your rates due to factors such as crime or crash rates in the area. 
• New car. If you purchase a different car within the first year, your rates could increase from your original quotes.
• Poor credit. If your credit goes down, your rates may increase after the first year until your credit score improves. Not all companies look at credit scores or are allowed to use credit scores, so this will depend on your state. 

At-fault accidents will generally stay on your record for three years, after which your insurer may consider lowering your auto insurance rates again if you’re still accident-free.

How to Reduce Your Auto Insurance Rates 

Just because your auto insurance rates don’t go down after the first year doesn’t mean you can’t work to reduce your auto insurance rates. Some of the things you can do to reduce your auto insurance include: 

• Shopping around for auto insurance quotes. Compare quotes from different insurance companies in your area to ensure you’re getting the best rate possible. 
• Participating in safe driving programs. If your insurance company offers a safe driving program, it can help reduce your rates if you’re a new driver.
• Taking advantage of discounts offered by the insurance company. Ensure you have any discounts you qualify for, as this can reduce rates. For example, there is a Geico low mileage discount.

If you drive safely and take advantage of discounts, you can reduce your auto insurance costs after the first year. Rates also naturally fall as you age. 

So, at what age does car insurance go down for most drivers? Usually, rates will decrease once drivers are out of their teens or become senior drivers. If you haven’t caused any accidents, your car insurance will go down at age 25.

The Final Word on Auto Insurance After the First Year 

If you’re a new driver or just signed up with an auto insurance company, it may take more than a year to see your auto insurance rates decrease. Safe driving can help you reduce your rates. 

It’s important to make sure you’re signing up with a company that will charge you reasonable rates, so shopping around for auto insurance quotes is a must. Geico insurance for new drivers is known to be affordable, and Allstate and State Farm are good options as well.

Use our free quote comparison tool to find your area’s best auto insurance rates.