The cost of annual insurance for 16-year-old car owners amounts to an average of almost $6,780, which is the most expensive among the different age groups.
In contrast, those who are in their mid-50s pay the least expensive premium at $1,690 on average. The reason younger car owners pay a higher premium has to do with their relative inexperience and a higher risk of accidents, compared to older people.
It seems that when it comes to driving and getting insurance premiums, age does matter. Insurance companies may think that younger car owners are more prone to accidents because of their lack of driving experience and their behavior on the road. A significant percentage of vehicular accidents today involve teens and young adults, some of which don’t have a driver’s license. The risk increases when the driver and passengers are intoxicated or under the influence of alcohol or prohibited drugs.
These make them likely to need insurance coverage and file a claim once they do get involved in a crash. Since insurance companies are businesses, they don’t want many people getting harmed and filing for claims that involve a huge sum of money. To compensate for the potential losses due to the prevalence of accidents involving young insured drivers, they put high premiums on insurance plans that target young people.
Male car owners would pay a higher premium than women between their teenage years and early 20s. By the time they turn 25, however, men would pay a few dollars less at $2,180 than the $2,188 annual premium for women. This slight difference will continue until they reach their mid-70s.
If you can’t afford your insurance at a young age, a good way to pay cheaper rates is to be part of your parents’ policy. Most insurance providers would be willing to offer lower premiums if they know that adults would take on the responsibility of adding a teenage driver. This also gives you a sense of responsibility and an urge to behave properly because your parents’ policy and reputation are on the line.
Analysis of States
Other factors that will determine your insurance premium include the state where you live in, and if you own a luxury car. For instance, the cost of Porsche scheduled maintenance in New York City may be cheaper than that in Hawaii, where the cost of ownership
An analysis also ranked Hawaii at the bottom of the list when it comes to traffic and infrastructure, as well as access to facilities such as car repair shops and gas stations. On the other hand, Texas ranked as the overall best state for car owners. This may be due to lower costs of ownership, lower gas prices, safety features and regulations, and traffic and infrastructure.
Owning a car when you reach the mid-20s doesn’t necessarily mean you would already pay a lower premium. Age would be a factor, but the place where you live will also be important in determining the actual cost of vehicle insurance.