Age is one of the various factors used by providers to calculate the premiums of customers and many believe that once a driver reaches the age of twenty-five they will have the price of their policy reduced; contrary to this popular belief, this is not necessarily true, if a 25 year old contacts their insurer on their 25th birthday to see if they are entitled to a lower rate, the chances are that they will not receive an immediate reduction in premium.

Motorists between the ages of 16 and 25 are statistically shown to be more likely to be involved in traffic accidents and will usually be charged more for policies than more mature drivers, but hitting the ripe old age of twenty five generally will not instantly drop the cost of coverage; in some cases these drivers can pay a similar amount for automobile coverage as younger motorists.

Although age is used as a factor to rate applicants, a person's driving history is one of the most determining factors used by auto insurance companies to calculate premiums. If a motorist has just become licensed at age 25 they will have as much experience behind the wheel as a newly licensed 16 year old and will be charged similarly until they have built a driving history that will show carriers the risk associated with insuring them.

Ways to Cut the Cost of Auto Insurance

If a motorist has be licensed for a certain number or years and reaches the age of twenty five, even though a current insurer may not be able or willing to lower their rates it is always a good idea to revisit policies and compare quotes from other carriers. By doing so, an individual may be able to find a provider who can offer lower rates, not necessarily because of their recent birthday, but because the company may just be able to offer cheaper premiums than their current provider. Comparing quotations is free and can be done quickly and easily; it is a good idea to periodically do so in order to ensure that the best rate is being paid regardless of what the age of the driver is.

When a motorist has been licensed for three years and has maintained a good driving record certain companies will offer them a good driver discount which will reduce premiums in the 20% range; this can help cut the cost of coverage significantly. Additionally, for those who may have tickets and/or accidents on their records, after a certain period of time (usually 3-5 years) following the date of the incident particular insurers will no longer use these incidents against the motorist and will allow for a reduced premium; it may be wise to shop around 3 years after a ticket or accident to see if lower rates can be found.

Individuals who purchase and finance new vehicles the finance company will usually require that the customer maintain coverage in the event that the vehicle sustains physical damage; this is commonly referred to as Comprehensive and Collision and will pay to repair or replace an automobile following a loss minus the deductible. Once the loan has been paid off a consumer may consider dropping this protection if the value of the vehicle has decreased to the point where it is no longer cost efficient to maintain this types of coverage.

The most effective way that consumers can cut the cost of automobile coverage is to be aware of their situation and needs for protection. It is far too often that individuals over pay for auto insurance simply because they do not periodically shop around to ensure that their company is the most competetively priced; as individuals needs change as well as thier driving records, the most affordable carrier will usually be different than their current provider.