How Seniors Can Save Money on Car Insurance
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August 18, 2024
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Countrywide, U.S. adults paid an average of $1,062 on car insurance in 2021, according to a 2023 report from the National Association of Insurance Commissioners (NAIC.) For seniors, costs are even higher, as age is a factor that affects car insurance rates. That said, there are many ways you can lower premiums, from cashing in on senior discounts to choosing pay-per-mile insurance. After years of working with seniors on their monthly budgets, the following methods resulted in the biggest savings.
Looking for the best rates on auto insurance? Then read our guide to the best car insurance for seniors.
Senior Discounts on Car Insurance
Many car insurance companies offer discounts to seniors who take a defensive driving course. Some companies with this discount include:
- Direct Auto Insurance: In certain states, seniors over 55 can complete an approved Motor Vehicle Accident Prevention course and save up to 5 percent with Direct Auto. Note that this discount only applies to liability insurance, uninsured motorist coverage, medical payments coverage, collision coverage, and comprehensive coverage.
- GEICO: People 50 and older – with no accidents or violations in the past three years and no one under 25 on their policies – can save by completing a defensive driving course. The exact eligibility requirements vary by state, but in Oregon, where I live, policyholders 50 or 55 years old who have completed the course are eligible.
- Nationwide: Seniors 55 and older can get a discount by taking a state-approved safety course.
- Progressive: Although Progressive admits that they raise premiums by 4 percent for policyholders 75 and older, they offer a similar driving course discount through the National Safety Council, AAA, and one of my favorites, AARP.
- The Hartford: AARP members can save on insurance with The Hartford by taking an approved defensive driving course. The best part is that this discount lasts for three years.
This isn’t a complete list of every auto insurance company that offers seniors discounts, so ask your agent which discounts apply to you as an older adult.
Pay-Per-Mile Car Insurance
According to a 2023 survey from the Pew Research Center, about four in five adults 65 and older are not employed. If that’s the case for you, you may be able to save money by enrolling in pay-per-mile car insurance, a form of usage-based insurance, or UBI. Here’s how it works: You’ll either use an app from the insurance company or a Bluetooth device plugged into your car to track the miles you drive. The fewer miles, the less you’ll pay for car insurance, so your rate could vary from month to month.
Pay-per-mile insurance is a good option for retired people, people with short commutes, people who mainly use public transportation, or people who work from home. Some companies that offer pay-per-mile insurance include Root, Metromile, Allstate, Nationwide, and, for military members and veterans only, USAA.
Other Ways to Save on Car Insurance
Aside from specific discounts for seniors, you may qualify for a number of other discounts, including:
- Electric and hybrid vehicles: Some insurance companies offer discounts to drivers of hybrid or electric vehicles.
- Military and veterans: Many companies offer discounts to current and former military members.
- Multicar: If you live in a household with multiple cars, insuring them under the same provider will save you money.
- Multipolicy: Bundling home and auto insurance under the same provider can unlock a discount, as well.
- Paperless billing/automatic payments: Most insurance companies will give you a discount just for enrolling in paperless billing and paying premiums via automatic payments each month. Not only is this more convenient, but it can bring rates down anywhere from 5 percent to 10 percent.
- Safe driving: You can get discounts for having no at-fault accidents or traffic violations in the past three consecutive years, or by going a certain number of years without accidents, violations, or claims.
- Safety features: Your car’s safety features, such as automatic braking systems and anti-theft devices, can get you a discount as well.
Discounts vary by company and state, so ask your agent and broker which ones apply to you. Also, consider discounts when comparing premiums from different companies.
Average Costs for Senior Car Insurance
Is it true that seniors pay more for car insurance? The answer is that it depends on many factors, including your insurance company. Based on policies sold across the U.S. from September 2020 to August 2021, here’s how much seniors paid, on average, for full coverage car insurance from Progressive:
- 50-54: $1,332
- 55-64: $1,200
- 65-74: $1,152
- 75 and older: $1,212
As you can see, costs start to rise when you reach age 75, but they decrease from ages 50 to 74. Again, age is only one factor that affects car insurance rates. There’s also your home address, vehicle make and model, driving history, and even credit score, in most states. So two people of the same age can have very different car insurance premiums.
Does Age Affect Car Insurance Rates?
Although age does affect insurance rates, rates do not necessarily increase with age. Here is the complete data set from Progressive, including the differences between age groups:
| Age | Annual average cost of full-coverage car insurance | Difference |
|---|---|---|
| 17 and under | $2,472 | n/a |
| 18 | $2,760 | 12% |
| 19-20 | $2,436 | -12% |
| 21-22 | $2,112 | -13% |
| 23-24 | $1,836 | -13% |
| 25-29 | $1,632 | -11% |
| 30-34 | $1,524 | -7% |
| 35-39 | $1,488 | -2% |
| 40-44 | $1,464 | -2% |
| 45-49 | $1,440 | -2% |
| 50-54 | $1,332 | -8% |
| 55-64 | $1,200 | -10% |
| 65-74 | $1,152 | -4% |
| 75+ | $1,212 | 5% |
Rates are highest for 18-year-old drivers, as they have little driving experience, can now drive without a supervisor, and are more likely to get into accidents. Rates decline when people hit age 19 and continue declining until age 75. That's when rates start to creep up again, by 5 percent from age 74 to 75.
Again, many factors affect rates aside from age. A 25-year-old with a DUI conviction may pay more than a 75-year-old with a clean driving record, in some cases. Alternatively, an older driver in New York City with a clean driving record may pay more than a 25-year-old with a clean driving record living in Rochester, New York. To get your exact quote, reach out to companies directly, as this data is based on averages.
Bottom Line
Although car insurance premiums rise at age 75, there are a number of ways to keep them as low as possible, from taking advantage of senior discounts to enrolling in pay-per-mile insurance. To find more ways to save money, read my full list of senior discounts.
Frequently Asked Questions
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Does auto insurance get cheaper with age?
According to Progressive, auto insurance gets cheaper with age, from ages 19 to 74, reaching an average lifetime low of $1,152 from ages 65 to 74. However, from age 75 and older, car insurance premiums increase.
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Are seniors more likely to get into crashes than younger people?
Seniors are actually less likely to be drivers in all car crashes, including fatal crashes. While licensed drivers ages 55 and older account for 39 percent of all drivers, they are only drivers in 28 percent of all crashes and 23 percent of all fatal crashes, according to 2022 data from the National Safety Council. Younger people ages 16 to 44 are overrepresented as drivers in crashes, and crash rates begin to decrease for drivers 45 and older.
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How can seniors save on their car insurance?
Seniors can save on their car insurance by:
- Completing state-approved defensive driving courses.
- Getting discounts for serving in the military, having car safety features, or being violation-free.
- Lowering their limits.
- Dropping unnecessary coverage.
- Raising their deductibles.
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Does AARP have car insurance?
Yes, AARP offers car insurance through The Hartford. AARP members save an average of $577 a year, or 10 percent of their premiums, when they switch to The Hartford. Savings are even higher for customers who bundle home and auto insurance: $813 a year, on average.