When Does Car Insurance Go Down?

If you recently started driving, or you’re exploring ways to lower your car insurance rate, you may be wondering whether car insurance premiums decrease. Fortunately, it does, car insurance rates are typically determined based on various demographic factors.

It’s important to properly know the most essential factors that influence car insurance rates, so that you can apply the right steps to lower your car insurance rate. Understanding what influences your rate is the first step toward saving money.

So, this article explores situations that allow car insurance to go down, along with effective tips to lower your car insurance premium in Michigan.

When Can You Expect Your Car Insurance Rate to Drop in Michigan?

Car insurance rates are typically determined based on various individual factors. Just like car insurance premiums can increase under certain circumstances, it can also decrease with time especially as you gain experience or maintain a clean driving record in Michigan.

Starting from your age and driving history to your deductible and annual mileage, many elements can influence when and how your rates go down. Here’s a breakdown of each of these factors that can lead your car insurance premiums to decrease over time.

Age, and Driving Experience

Whether it’s in Michigan, or any other state across the U.S., the youngest drivers are charged the highest car insurance rates. This is mainly because the youngest drivers are responsible in frequent accidents that lead to severe bodily injuries, vehicle and property damage, and even death.

According to Michigan Traffic Crash Facts, young drivers between the age of 15 to 20 are responsible for 7.3% of car accidents leading to 79% of all traffic deaths, and 53% of these deaths included drivers.

As teenagers and young drivers are typically less experienced, they tend to get involved in distracted, and even reckless driving by unnecessary speeding or participating in illegal street racing leading to these dangerous accidents.

But evidently, car insurance rates typically go down with age, as older drivers tend to be more cautious and responsible. Plus, due to increased driving experience drivers who are 25 and above tend to get involved in lesser traffic accidents. The chart below shows how age affects car insurance rates, and how it decreases with age.

Good Driving Record

Your car insurance rate will subsequently go down if you can maintain a good driving record. A good driving record indicates that you’re less prone to getting into an accident which means you’re less likely to claim car insurance.

So, as a result, you’re likely to get benefitted from lower car insurance premiums along with discounts, bundle plans and other lucrative offers. If you can build up a track record of having a good driving record, you can expect your car insurance rate to go down over time.

Insurance Claims History

Insurance companies typically evaluate and determine car insurance rates based on your insurance claims history. If you have a track record of frequently claiming or just claiming insurance in the past year or within 3 to 5 years, your car insurance rate is likely to increase.

However, if you haven’t claimed any insurance in the last 3 to 5 years, and you maintain a track record of not claiming car insurance as you haven’t gotten involved in accidents lately, then your car insurance rate is likely to decrease. Typically, each time an insurer covers you, they need to invest a substantial amount.

If you have this tendency of not claiming car insurance, the odds of investing a significant amount to cover any accidental damages are significantly lower. So, that’s why you get the advantage of lower car insurance rate over time or with passing year.

Location

Location is a prime factor when it comes to determining car insurance rates. The car insurance rate can ideally vary from across states, countries, cities, suburbs, and villages in Michigan. Typically, cities with a high population density, complex roads and traffic systems tend to have more accidents.

Location-wise Michigan is among the states with the highest number of car accidents of 290,000 per year on average according to Michigan State Police. In the US, Michigan is ranked as the 10th most car accident prone state with a total death toll of 1,084 as of April 2025.

Due to the high number of accidents Michigan has among the highest car insurance rates in the country. The average cost of liability only insurance in Michigan is $890 per year which is 21% more than the national average. Whereas states such as Rhode Island, New Jersey, Massachusetts and Minesota have the lowest car accidents in the US, which also makes car insurance relatively much cheaper there.

Similarly, if you look into the cities within Michigan, car insurance rates significantly vary from one city to another. According to WalletHub, these are the 4 cheapest cities for car insurance in Michigan as follows.

• Holland: $1,642 per year
• Traverse City: $1,643 per year
• Grand Rapids: $1,668 per year
• Kalamazoo: $1,674 per year

Whereas here are 4 most expensive cities in Michigan for car insurance. 

• Detroit: $5,690 
• Dearborn:  $4,572 
• Southfield: $4,271 
• Warren: $4,135

Notice how car insurance rates significantly vary across cities within the same state. So, if the overall traffic system within a particular city improves, and if the crime rate goes down the car insurance rate is also likely to decrease. Or, if you move to another city offering a cheaper car insurance rate such as Holland, you can instantly benefit from lower insurance rate either in the following year or if you purchase car insurance any time soon.

If you’re looking for affordable car insurance coverage from a reliable insurance agency in cities such as Flint, Saginaw, Mt Pleasant or anywhere in Michigan, consider exploring our insurance solutions or visit our regional offices.

Vehicle Type

Your car insurance rate significantly depends on the type of vehicle, and it’s make and model. Compared to a regular sedan car, it costs much more to repair or replace a luxury car, or an expensive sports car. So, that’s why your car insurance rate can widely vary depending on the type of car you own.

So, if you want to reduce your car insurance rate, you should consider purchasing or switching to a less expensive car. Remember the cheaper it is to repair and replace the car, the cheaper your car insurance rate is likely to be.

Lower Annual Milage

The more you drive your car, the higher the possibility of getting into a car accident. So, if you limit your annual milage to 7,500 miles or less your car insurance rate can significantly go down by 40% or more.

If you consistently drive less, you might also want to consider telematics-based auto insurance. These programs track your driving habits, including total mileage, and adjust your premium accordingly. The less you drive, the lower your insurance rate is likely to be.

Higher Insurance Deductibles

By increasing your car insurance deductible, you can significantly decrease your insurance premium. When you increase your deductibles, you agree to pay a higher amount initially after an accident before your insurance coverage kicks in.

In this way, there’s a chance that your insurer may not have to compensate you as much, or none at all. For example, after a car accident, if the vehicle damages cost $1500 to repair, whereas you have a deductible of $1,000, then you will have to pay the deductible of $1,000 and your insurer will cover the remaining $500.

On the other hand, if it takes $800 to repair the car, and if you have a deductible of $1,000 then you will have to pay the entire repair cost out of pocket. So, having a higher deductible means you’re taking a higher risk for the damages, and that’s why insurers usually offer lower insurance rates for higher deductibles.

Note: Only opt for a high deductible or increase it when you know you can easily pay it out of pocket without any financial stress. Remember the main reason for acquiring car insurance is to stay financially protected.

Switching Insurers

There are times when sticking to the same insurance company can cost you more with each passing year. So, instead of renewing your car insurance with your current insurer, it may be more feasible to switch to another insurer offering a lower rate.

The car insurance industry in Michigan is very competitive. So, if you’re considering switching to an insurer offering lower premiums, you should shop around carefully to find a reliable auto insurance agency in Michigan that has a seamless, quick and easy insurance claims process.

The Bottom Line

When it comes to car insurance premiums, the best part is mainly determined based on individual factors. So, this gives you more control to bring it down to a lower amount over time.

Simply by following proper traffic rules and driving safely you can maintain good driving records and avoid accidents. In this way, you wouldn't have to claim insurance either. If you can subsequently keep it up for 1 to 3 years, then your car insurance can go down significantly.

Sometimes, lowering your premium means switching to a provider that offers better rates or coverage options. Whether you're looking for more affordable insurance or a policy that better fits your needs, contact us today for a free quote and personalized consultation.

FAQ

How long until my car insurance goes down?

It mainly depends, your car insurance can go down in the following year, or it can take 1 to 3 years or so for your car insurance premiums to fall. However, you will have to consistently maintain a good driving record and avoid accidents so that you don’t have to claim your auto insurance.  

Does car insurance really go down at 25?

Yes, based on car accident trends in Michigan and throughout the U.S. young drivers between the ages of 16 to 20 are most prone to getting into accidents due to excessive speeding and reckless driving. Drivers around 25, or more tend to be more responsible, and adhere to safe driving practices. So, based on age, your car insurance can go down when you’re 25 and above. 

How to get car insurance to go down?

There are various ways to get your car insurance to go down, such as maintaining a good driving record, seeking discounts, going for bundle plans, participating in safe driving program, opting for higher deductibles, or switching insurers.