Updated on 26 Dec 2025
Buying a car is exciting, but the costs don’t stop at the sticker price. One question many car owners have is whether their insurance will get cheaper as their car gets older. This matters because it directly affects your budget and helps you plan for the year ahead. Insurance costs depend on several factors, including your driving record, claims history, the age of your car and the type of coverage you choose. Other factors, such as repair costs, add-ons and location, can also influence your premium.
In this blog, let’s talk about what affects car insurance so you can make informed decisions, manage costs and choose a policy that works best for you.
Does car insurance decrease annually?
In India, car insurance premiums don't automatically decrease on a yearly basis. Several factors come into play when determining the cost of car insurance, including:
- Age of the vehicle
- Make of the vehicle
- Model of the vehicle
- Policyholder’s driving history
- Geographical
Factors that influence car insurance premiums
Apart from these, there are other factors that can affect premium rates. Scroll down to understand these factors in detail:
- Depreciation and premiums: As a car gets older, its value depreciates over time. This depreciation may potentially lead to a reduction in the insurance premium. However, it's important to note that other aspects, such as repair costs and replacement part prices, can counterbalance this decrease.
- Claim history: A history of filing claims may impact premium rates. On the other hand, not having any claims can result in premium discounts through a no-claims bonus (NCB) system.
- Zero Depreciation add-on: By opting for this add-on feature, policyholders ensure that their insurance provider compensates for any depreciation in car parts value during repairs or replacements. This includes covering expenses like airbag replacement costs.
Role of no claim bonus (NCB) in reducing premium
No Claim Bonus, or NCB, is a benefit provided by insurers for not making any claims during the policy year. In most cases, it reduces the premium you pay when renewing your policy, with the discount increasing for each consecutive claim-free year up to the insurer’s maximum limit.
However, if a claim is made during the policy period, the NCB may be reduced or reset, depending on the insurer’s terms.
Situations where car insurance may not decrease
Your car insurance may not decrease in some situations. For example, if you make frequent claims, get traffic fines or change to a higher-value car, the premium can stay the same or even increase. Insurance also may not drop if you move to a high-risk area.
Comprehensive insurance vs third-party premium trend
Comprehensive insurance usually costs more because it covers both your car and others in an accident, along with theft or damage.
On the other hand, the premium for third party car insurance is lower, but it only covers the expenses of others. Over time, third-party premiums rise slowly, while comprehensive plans show higher premium trends due to wider coverage.
Tips to keep car insurance premiums low
You can keep your car insurance premiums low by driving safely, avoiding claims and maintaining a clean record. Compare policies before buying, choose higher deductibles and avoid unnecessary add-ons. Regularly review your coverage, bundle policies if possible and keep your car in good condition to lower risks and costs.
Conclusion
Being proactive with your insurance by maintaining a clean driving record, avoiding unnecessary claims, comparing policies and using available discounts can help you control costs and get the coverage you truly need.
While you focus on safe driving and managing your car, let us help you take care of your insurance needs. Get tailored car insurance policy advice and solutions by filling out the form provided on this page, and make sure you have the right coverage for your situation.
FAQs
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Does car insurance go down every year?
Not always, your premium may be reduced if you keep a clean driving record and avoid claims, but other factors like age and car type also matter.
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Why doesn’t my car insurance decrease each year?
Insurance depends on risk. Even if your car gets older, things like accidents, traffic tickets or rising costs can stop your premium from dropping.
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How can I make my car insurance decrease?
Drive safely, keep a good record and avoid claims. You can also compare plans and ask your insurer for discounts each year.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.