You’ve probably heard the rumor circulating around. You turn 25 and suddenly, not only can you finally rent a car but your auto insurance quotes will also drop dramatically. Is it true?

Here’s What We Know:

A driver’s car insurance premium is based on many different factors. These include location, type of car, driving record, age, gender, and an individual’s credit.

While all of these factors hold weight, the two most significant are typically driving record and age. Auto insurers look at as much information as possible to determine how likely you are to submit a car insurance claim. Of course, the only true information they have to go on is your past record.

Insurers look at previous incidents on your record and also at statistics of other drivers who are your age. By doing this, they are able to estimate your risk.

So, in the end, your car insurance rate revolves around this question: how risky are you?

More: Car insurance for teens

Your driving history is the most concrete piece of evidence an auto insurer has. They can compare your age to statistics of other similar drivers – and they do – but how you drive is still the most dominant factor.

That’s why we can’t just say that yes, your rate will surely decrease at 25 years old as there are multiple weighted points that go into consideration.

True or False?

Let’s think about it. Individuals typically start driving around the age of 16 or 17. That means that by the time they turn 25, they have about eight or nine years of driving experience under their belt. That’s a timeline with a lot of valuable information, as he or she has likely developed some engrained driving habits. Car insurers will definitely take that history into account when determining your premium.

Yet carriers don’t just ignore your age. Drivers between the ages of 15-24 are only 14% of the population and yet they account for 30% of vehicle collision expenses.  That’s jarring information and auto insurers recognize that. Once you turn 25, your chance of collision involvement is statistically lower and insurers will respect that. Premium rates do often decrease at the age of 25 for those that have a relatively clean driving record. If you’re a safe driver then you could see your rates drop substantially.

Male drivers without many violations or collisions can see their rates drop 25% and female drivers can see decreases up to 15%. The discrepancy is due to the fact the young male drivers are typically seen as more high-risk, meaning their premium rates are usually much higher when they first begin driving. Also, if you’ve recently married, you can see even more savings.

How to Get the Decrease?

Drive safe! That’s honestly the best way to see your premium drop. While your car-make and model, location, and mileage are all taken into account, your driving behavior is most important. You can always ask about car insurance discounts to make sure you’re taking advantage of everything you’re eligible for. If you really want to share your driving behavior with your carrier, there’s also usage-based insurance.

Just remember that the rate decrease isn’t automatic. The reduction isn’t automatically applied to your car insurance at midnight and might not be added on until your next policy term. Remind your agent of your age, and consider shopping around to compare rates if your current premium still seems high. You don’t want to be forced to wait six months to see the reductions when they could start today.

There are only so many big birthdays to look forward to. If you have a clean driving record, then your 25th might be the magic number for your premium decrease. If not, keep on with the safe and focused driving. You’ll get there soon.