Car insurance for people under 25 is more expensive than for other age categories, in part because they are statistically more likely to take risks and get into car accidents. Even with a good driving history and an otherwise solid background, insurance companies still charge higher rates simply based on age. This can be countered with sensible planning and clever strategy.
The younger a driver is, the higher his insurance rates will be. Young people, especially teenagers, are far more likely to get into serious car accidents than the population at large. This may seem like unfair discrimination against the young, but successful use of statistical modeling allows insurance companies to keep overall rates far lower than they would need to be otherwise.
As auto insurance is required to drive a car, it's important to build up insurance history as a young person early on to secure lower rates in the future. Building that history creates a foundation of past behavior that an insurance company can then use to evaluate its potential risk. The more that their risk can be quantified, the less they can afford to bring down their rates.
Speeding tickets, accidents and intoxication tickets can all raise insurance rates on a young driver to almost unimaginably high rates. Driving a faster, lighter car will also be perceived as a warming sign by an auto insurance company, as it indicates that the potential customer lacks a desire to limit their auto risks. Drivers of lighter cars should factor in the extra insurance costs that they will pay when they're shopping around based on price.
The best way to limit auto insurance costs for people under 25 is to do everything to lower the overall rates. Getting multiple cars covered, perhaps under a family plan, is often a good way to lower costs. Additional driving lessons can also show insurance companies that you take auto safely seriously. Recklessness has massive additional costs--avoid speeding and other risky driving behavior.
Marital status also affects insurance rates. While it's not a good idea to get married simply to lower auto rates, under-25 newlyweds often find that their insurance company gives them a wedding gift in the form of lower auto insurance rates. Young families with children also get access to lower insurance rates. Driving safely throughout the under-25 age period can often pay off significant dividends on insurance premiums later on in life. It's worth it to take the precautions for both personal safety and pocketbook preservation.
- Daniel Diggens, Flickr