Key Takeaways
- On average, 21-year-olds pay about $4,186 while 25-year-olds pay $3,070 per year for full-coverage insurance.
- The cheapest companies for young drivers include USAA, Travelers, Geico and Nationwide.
- Young drivers can save money by comparing multiple quotes and looking for discounts.
Cheap car insurance for young adults isn’t always easy to find, but if you’re willing to search it’s out there. Rates are nowhere near as expensive as for 16-year-olds, and they usually continue to decrease as a driver ages.
We at the MarketWatch Guides team researched the country’s cheapest car insurance companies and have now ranked them for young drivers. We took into account each provider’s standard costs, coverage options and customer service when deciding which companies stand out for this age group.
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Best Cheap Car Insurance for Young Drivers
There’s no single company that always offers the best car insurance for young adults, but certain options stand out. Our rate estimates show that USAA and Geico are consistently affordable choices for younger drivers in their 20s.
Cheap Insurance Rates for Young Drivers
Young drivers pay substantially more for car insurance coverage because they lack driving experience. While drivers in their early 20s will find more affordable options than teenage drivers, they still pay more for auto insurance than older drivers in their 30s and up.
The tables below show the cheapest car insurance providers for 21-year-old drivers and 25-year-old drivers.
Cheapest Young Driver Insurance for 21-Year-Olds: Full Coverage
USAA offers the cheapest full-coverage insurance for 21-year-olds at $218 per month or $2,613 per year. Travelers and Geico are also affordable for drivers of this age. Full coverage typically includes liability, comprehensive and collision insurance. These types of insurance cover you and your vehicle in a variety of situations.
| Cheapest Young Driver Insurance | Monthly Car Insurance Estimate | Annual Car Insurance Estimate |
|---|---|---|
| USAA | $218 | $2,613 |
| Travelers | $219 | $2,627 |
| Geico | $250 | $2,998 |
| Nationwide | $261 | $3,134 |
| Auto-Owners | $274 | $3,293 |
| Erie Insurance | $275 | $3,303 |
| Progressive | $327 | $3,929 |
| American Family | $367 | $4,401 |
| State Farm | $374 | $4,491 |
| Allstate | $448 | $5,373 |
| Farmers | $451 | $5,418 |
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Cheapest Young Driver Insurance for 21-Year-Olds: Minimum Coverage
USAA also offers the cheapest minimum coverage for 21-year-olds of $62 per month or $743 per year. Geico and Auto-Owners also offer some of the cheapest insurance for 21-year-olds who just need the basics covered. Be aware that minimum-liability insurance only compensates other parties when you cause an accident and it doesn’t cover your car.
| Cheapest Young Driver Insurance | Monthly Car Insurance Estimate | Annual Car Insurance Estimate |
|---|---|---|
| USAA | $62 | $743 |
| Geico | $80 | $960 |
| Auto-Owners | $85 | $1,015 |
| Travelers | $86 | $1,034 |
| Erie Insurance | $99 | $1,190 |
| Nationwide | $116 | $1,387 |
| Progressive | $118 | $1,421 |
| State Farm | $134 | $1,613 |
| Allstate | $145 | $1,746 |
| American Family | $173 | $2,071 |
| Farmers | $190 | $2,281 |
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Cheapest Young Driver Insurance for 25-Year-Olds: Full Coverage
Insurance rates go down as you age, so 25-year-olds pay less than 21-year-olds on average. Our data shows that Travelers is the cheapest full-coverage option for this age group with average rates of $166 per month or $1,987 per year. USAA and Geico are also affordable.
| Cheapest Young Driver Insurance | Monthly Car Insurance Estimate | Annual Car Insurance Estimate |
|---|---|---|
| Travelers | $166 | $1,987 |
| USAA | $182 | $2,179 |
| Geico | $192 | $2,302 |
| Nationwide | $196 | $2,352 |
| Auto-Owners | $205 | $2,459 |
| Erie Insurance | $207 | $2,483 |
| Progressive | $226 | $2,707 |
| American Family | $262 | $3,144 |
| State Farm | $269 | $3,228 |
| Allstate | $317 | $3,808 |
| Farmers | $341 | $4,086 |
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Cheapest Young Driver Insurance for 25-Year-Olds: Minimum Coverage
Opting for basic coverage can save you money as a 25-year-old. If you qualify, USAA offers average rates of $48 per month or $578 per year in this case. Auto-Owners, Geico, Travelers and Erie all offer rates under $70 per month.
| Cheapest Young Driver Insurance | Monthly Car Insurance Estimate | Annual Car Insurance Estimate |
|---|---|---|
| USAA | $48 | $578 |
| Auto-Owners | $59 | $705 |
| Geico | $61 | $729 |
| Travelers | $62 | $741 |
| Erie Insurance | $69 | $831 |
| Progressive | $81 | $967 |
| Nationwide | $82 | $987 |
| State Farm | $90 | $1,077 |
| Allstate | $107 | $1,288 |
| American Family | $117 | $1,404 |
| Farmers | $129 | $1,554 |
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When you’re shopping for cheap car insurance for young adults, compare your options. The cheapest provider in your state might not best suit your needs. That’s why research matters.
Who Offers the Cheapest Car Insurance for Young Drivers?
Our rate data shows 21-year-olds pay an average of $4,186 per year for full coverage while 25-year-olds pay $3,070. Looking at minimum coverage, 21-year-olds pay $1,441 while 25-year-olds pay $1,009. However, rates vary drastically by state and provider. Below, we’ll cover the average rate for full and minimum coverage for young drivers in each state along with the cheapest company and its rates.
Cheapest Insurance for 21-Year-Olds
While rates are on the high side for 21-year-olds, they’re typically much lower than rates for car insurance for teenage drivers. Travelers and Geico are often the cheapest companies for 21-year-olds looking at minimum and full coverage by state, which you can see below. We omitted USAA from these tables because it isn’t available to everyone, but USAA is often one of the cheapest options.
| State | Average Full-Coverage Cost for 21-Year-Olds | Cheapest Provider for 21-Year-Olds | Cheapest Provider Cost |
|---|---|---|---|
| Alaska | $3,783 | Geico | $2,085 |
| Alabama | $3,260 | Travelers | $2,105 |
| Arkansas | $3,705 | Progressive | $3,343 |
| Arizona | $5,069 | Geico | $2,129 |
| California | $4,725 | Geico | $2,891 |
| Colorado | $4,302 | American National | $2,180 |
| Connecticut | $5,701 | Geico | $3,000 |
| District of Columbia | $4,340 | Erie Insurance | $3,188 |
| Delaware | $5,095 | Travelers | $2,459 |
| Florida | $5,829 | Geico | $3,588 |
| Georgia | $4,645 | Central Insurance | $2,801 |
| Hawaii | $1,580 | Geico | $1,206 |
| Iowa | $3,251 | Pekin Insurance | $2,263 |
| Idaho | $2,610 | Geico | $1,614 |
| Illinois | $4,479 | Travelers | $2,573 |
| Indiana | $3,409 | Travelers | $2,107 |
| Kansas | $4,040 | Travelers | $2,413 |
| Kentucky | $4,134 | Travelers | $2,416 |
| Louisiana | $7,340 | Southern Farm Bureau | $3,864 |
| Massachusetts | $5,090 | Plymouth Rock | $2,838 |
| Maryland | $4,764 | Travelers | $2,948 |
| Maine | $2,563 | Travelers | $1,433 |
| Michigan | $6,529 | Geico | $3,160 |
| Minnesota | $3,788 | Travelers | $2,501 |
| Missouri | $3,808 | Travelers | $2,268 |
| Mississippi | $3,313 | Nationwide | $2,031 |
| Montana | $3,620 | State Farm | $1,948 |
| North Carolina | $2,653 | Progressive | $1,061 |
| North Dakota | $3,369 | American Family | $2,024 |
| Nebraska | $3,461 | Farmers Mutual of Nebraska | $2,274 |
| New Hampshire | $3,129 | MMG Insurance | $2,081 |
| New Jersey | $5,661 | Geico | $2,836 |
| New Mexico | $3,849 | Geico | $2,537 |
| Nevada | $7,079 | Travelers | $3,155 |
| New York | $8,549 | Progressive | $4,238 |
| Ohio | $2,837 | Nationwide | $1,390 |
| Oklahoma | $4,602 | American Farmers & Ranchers | $2,878 |
| Oregon | $3,872 | Travelers | $2,342 |
| Pennsylvania | $6,629 | Travelers | $2,736 |
| Rhode Island | $5,791 | Travelers | $3,561 |
| South Carolina | $3,619 | American National | $1,377 |
| South Dakota | $3,621 | Farmers Mutual of Nebraska | $2,093 |
| Tennessee | $3,852 | Travelers | $2,480 |
| Texas | $4,481 | Redpoint Insurance | $1,749 |
| Utah | $4,152 | Geico | $2,115 |
| Virginia | $3,385 | Geico | $2,046 |
| Vermont | $2,311 | Auto-Owners | $1,671 |
| Washington | $3,417 | Farmers | $2,205 |
| Wisconsin | $3,592 | Secura Insurance | $1,885 |
| West Virginia | $3,962 | Erie Insurance | $2,894 |
| Wyoming | $3,030 | American National | $1,845 |
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| State | Average Minimum-Coverage Cost for 21-Year-Olds | Cheapest Provider for 21-Year-Olds | Cheapest Provider Cost |
|---|---|---|---|
| Alaska | $1,021 | Geico | $688 |
| Alabama | $976 | Travelers | $582 |
| Arkansas | $972 | Alfa Insurance | $779 |
| Arizona | $1,610 | Geico | $768 |
| California | $1,109 | Geico | $646 |
| Colorado | $1,141 | American National | $483 |
| Connecticut | $2,423 | Geico | $1,218 |
| District of Columbia | $1,338 | Chubb | $545 |
| Delaware | $1,984 | Travelers | $808 |
| Florida | $2,372 | Geico | $1,121 |
| Georgia | $2,076 | Central Insurance | $1,064 |
| Hawaii | $469 | Geico | $276 |
| Iowa | $728 | Progressive | $505 |
| Idaho | $725 | American National | $361 |
| Illinois | $1,259 | Travelers | $751 |
| Indiana | $957 | Travelers | $568 |
| Kansas | $1,168 | Travelers | $595 |
| Kentucky | $1,732 | Kentucky Farm Bureau | $626 |
| Louisiana | $2,993 | Geico | $1,367 |
| Massachusetts | $1,479 | Plymouth Rock | $821 |
| Maryland | $2,120 | Travelers | $1,152 |
| Maine | $779 | Travelers | $436 |
| Michigan | $2,754 | Auto-Owners | $1,065 |
| Minnesota | $1,178 | Auto-Owners | $880 |
| Missouri | $1,119 | Travelers | $596 |
| Mississippi | $987 | National General | $697 |
| Montana | $839 | State Farm | $370 |
| North Carolina | $871 | Erie Insurance | $451 |
| North Dakota | $810 | North Star Mutual | $531 |
| Nebraska | $922 | Farmers Mutual of Nebraska | $558 |
| New Hampshire | $1,036 | The Hanover | $471 |
| New Jersey | $2,535 | Geico | $1,028 |
| New Mexico | $1,134 | Central Insurance | $562 |
| Nevada | $3,430 | Travelers | $1,188 |
| New York | $3,808 | Progressive | $2,189 |
| Ohio | $863 | Travelers | $582 |
| Oklahoma | $1,294 | American Farmers & Ranchers | $684 |
| Oregon | $1,770 | Travelers | $914 |
| Pennsylvania | $1,599 | Travelers | $728 |
| Rhode Island | $2,251 | Travelers | $1,321 |
| South Carolina | $1,417 | American National | $436 |
| South Dakota | $725 | Farmers Mutual of Nebraska | $421 |
| Tennessee | $1,089 | Travelers | $565 |
| Texas | $1,497 | Redpoint Insurance | $726 |
| Utah | $1,682 | Geico | $849 |
| Virginia | $1,195 | Travelers | $672 |
| Vermont | $589 | Union Mutual | $373 |
| Washington | $1,042 | Farmers | $567 |
| Wisconsin | $1,071 | Geico | $519 |
| West Virginia | $1,048 | Erie Insurance | $605 |
| Wyoming | $486 | American National | $308 |
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Cheapest Insurance for 25-Year-Olds
It’s considerably less difficult to find cheap car insurance for young adults when you’re 25 rather than 21. Travelers and Geico are again among the cheapest providers for 25-year-olds in each state. That said, some smaller companies like North Star Mutual and Virginia Farm Bureau have low rates for this age group.
| State | Average Full-Coverage Cost for 25-Year-Olds | Cheapest Provider for 25-Year-Olds | Cheapest Provider Cost |
|---|---|---|---|
| Alaska | $2,553 | Geico | $1,746 |
| Alabama | $2,411 | Travelers | $1,479 |
| Arkansas | $2,858 | Progressive | $2,446 |
| Arizona | $3,654 | Geico | $1,652 |
| California | $3,731 | Geico | $2,635 |
| Colorado | $3,203 | American National | $1,584 |
| Connecticut | $3,954 | Geico | $1,713 |
| District of Columbia | $3,111 | Progressive | $2,204 |
| Delaware | $3,839 | Travelers | $1,698 |
| Florida | $4,376 | Geico | $2,568 |
| Georgia | $3,282 | Central Insurance | $2,231 |
| Hawaii | $1,580 | Geico | $1,206 |
| Iowa | $2,373 | Pekin Insurance | $1,539 |
| Idaho | $1,833 | Geico | $1,124 |
| Illinois | $3,326 | Travelers | $1,753 |
| Indiana | $2,407 | Travelers | $1,445 |
| Kansas | $2,944 | Travelers | $1,776 |
| Kentucky | $3,118 | Travelers | $1,713 |
| Louisiana | $5,568 | Southern Farm Bureau | $3,193 |
| Massachusetts | $2,934 | Plymouth Rock | $2,036 |
| Maryland | $3,214 | Travelers | $2,063 |
| Maine | $1,688 | Travelers | $904 |
| Michigan | $5,501 | Geico | $2,235 |
| Minnesota | $2,789 | Travelers | $1,782 |
| Missouri | $2,888 | Travelers | $1,641 |
| Mississippi | $2,442 | Nationwide | $1,621 |
| Montana | $2,678 | Nationwide | $1,554 |
| North Carolina | $2,432 | Progressive | $1,061 |
| North Dakota | $2,415 | American Family | $1,489 |
| Nebraska | $2,507 | Nationwide | $1,699 |
| New Hampshire | $2,208 | Auto-Owners | $1,690 |
| New Jersey | $3,747 | Geico | $2,054 |
| New Mexico | $2,705 | Geico | $1,986 |
| Nevada | $4,661 | Travelers | $2,230 |
| New York | $6,292 | Progressive | $2,929 |
| Ohio | $1,963 | Nationwide | $965 |
| Oklahoma | $3,191 | Geico | $2,299 |
| Oregon | $2,685 | Travelers | $1,575 |
| Pennsylvania | $5,072 | Travelers | $1,994 |
| Rhode Island | $3,672 | Travelers | $2,397 |
| South Carolina | $2,632 | American National | $962 |
| South Dakota | $2,765 | Farmers Mutual of Nebraska | $1,636 |
| Tennessee | $2,743 | Travelers | $1,731 |
| Texas | $3,439 | Redpoint Insurance | $1,749 |
| Utah | $3,062 | Geico | $1,644 |
| Virginia | $2,380 | Virginia Farm Bureau | $1,320 |
| Vermont | $1,584 | Union Mutual | $903 |
| Washington | $2,455 | Farmers | $1,964 |
| Wisconsin | $2,515 | Secura Ins Grp | $1,452 |
| West Virginia | $2,715 | Erie Insurance | $2,083 |
| Wyoming | $2,009 | American National | $1,191 |
| State | Average Minimum-Coverage Cost for 25-Year-Olds | Cheapest Provider for 25-Year-Olds | Cheapest Provider Cost |
|---|---|---|---|
| Alaska | $670 | Allstate | $569 |
| Alabama | $697 | Travelers | $426 |
| Arkansas | $723 | Progressive | $574 |
| Arizona | $1,147 | Travelers | $559 |
| California | $843 | CSAA Insurance (AAA) | $541 |
| Colorado | $798 | American National | $301 |
| Connecticut | $1,623 | Geico | $682 |
| District of Columbia | $967 | Chubb | $452 |
| Delaware | $1,465 | Travelers | $582 |
| Florida | $1,813 | Geico | $808 |
| Georgia | $1,374 | Central Insurance | $774 |
| Hawaii | $469 | Geico | $276 |
| Iowa | $494 | Pekin Insurance | $313 |
| Idaho | $508 | American National | $215 |
| Illinois | $925 | Travelers | $534 |
| Indiana | $649 | Travelers | $408 |
| Kansas | $846 | Travelers | $456 |
| Kentucky | $1,157 | Kentucky Farm Bureau | $477 |
| Louisiana | $1,909 | Southern Farm Bureau | $1,037 |
| Massachusetts | $890 | Plymouth Rock | $611 |
| Maryland | $1,433 | Geico | $827 |
| Maine | $537 | Travelers | $321 |
| Michigan | $2,184 | Auto-Owners | $893 |
| Minnesota | $870 | North Star Mutual | $554 |
| Missouri | $817 | Travelers | $463 |
| Mississippi | $707 | National General | $490 |
| Montana | $610 | State Farm | $321 |
| North Carolina | $803 | Erie Insurance | $391 |
| North Dakota | $588 | North Star Mutual | $295 |
| Nebraska | $625 | Farmers Mutual of Nebraska | $370 |
| New Hampshire | $704 | The Hanover | $368 |
| New Jersey | $1,744 | Geico | $808 |
| New Mexico | $729 | Central Insurance | $378 |
| Nevada | $2,141 | Travelers | $841 |
| New York | $2,769 | Progressive | $1,534 |
| Ohio | $571 | Erie Insurance | $363 |
| Oklahoma | $817 | American Farmers & Ranchers | $552 |
| Oregon | $1,260 | Travelers | $680 |
| Pennsylvania | $1,145 | Travelers | $511 |
| Rhode Island | $1,415 | Travelers | $818 |
| South Carolina | $1,006 | American National | $275 |
| South Dakota | $503 | Farmers Mutual of Nebraska | $278 |
| Tennessee | $775 | Travelers | $423 |
| Texas | $1,097 | Texas Farm Bureau | $651 |
| Utah | $1,183 | Geico | $671 |
| Virginia | $841 | Virginia Farm Bureau | $474 |
| Vermont | $411 | Union Mutual | $219 |
| Washington | $748 | Farmers | $490 |
| Wisconsin | $714 | Secura Ins Grp | $367 |
| West Virginia | $712 | Automobile Club Michigan (AAA) | $435 |
| Wyoming | $332 | American National | $189 |
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Why Do Insurance Companies Charge More for Young Drivers?
Cheap car insurance for young adult drivers can be difficult to find because the group is often categorized as high risk. That’s due to multiple factors, which we’ll discuss in further detail below.
Inexperience on the Road
While young adults have typically spent more time behind the wheel than new drivers, they’re still lacking in certain aspects of driving. Car insurance companies take that into account by charging higher rates for those with little more than a decade of experience behind them.
Rates tend to decrease as young adults gain more years of experience on the road. There are also good driver policy discounts available for motorists who go a certain number of years without receiving traffic violations.
High Numbers of DUIs
In a 2022 study from the National Highway Traffic Safety Administration (NHTSA), the highest percentage of drunk drivers in the U.S. was among the 21- to 24-year-old age group. In second place were 25- to 34-year-olds.
Young male motorists in particular get involved in many DUIs, with four male drunk drivers being caught for every female. Since driving while intoxicated increases your risks on the road, insurers tend to charge higher rates for young drivers who have a stronger chance of getting a DUI.
Greater Number of Serious Accidents
Young adults also struggle to find cheap car insurance because of their overrepresentation in car accidents. Here are the number of accident fatalities in 2023 by age group according to the NHTSA:
| Age Group | Crash Fatalities in 2023 |
|---|---|
| 15 to 24 | 7,016 |
| 25 to 34 | 7,587 |
| 35 to 44 | 6,475 |
| 45 to 54 | 5,284 |
| 55 to 64 | 5,663 |
| 65+ | 7,960 |
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Since young adults have a greater likelihood of getting into serious accidents, auto insurers often charge them higher prices. Motorists in this age group are considered higher-risk drivers, and their premiums often reflect that.
Ask the Expert: Why do insurance companies charge more for young drivers?
“Insurance companies are in the business of managing risk, and young drivers are a bit of a wild card.
They haven’t had years of experience navigating tricky situations on the road, so statistically, they’re more likely to get into accidents.”
“Younger drivers have a higher rate of deadly crashes.
This is largely due to their inexperience, immaturity and overconfidence. Studies have found that younger drivers, teens especially, are more likely to be distracted drivers, especially by their peer passengers.”
“The insurance industry looks at analytic data to determine rates for drivers.
Their analysis will show that certain age groups have more accidents than others. In this case, younger, less experienced drivers will be at higher risk of accidents based upon data.”
Best Cheap Auto Insurance Companies for Young Drivers
We recommend that young adults consider Geico, USAA, State Farm and Progressive for auto coverage. All four of these companies offer great customer service and some of the country’s cheapest car insurance rates. They also have excellent reputations and are financially strong.
Geico: Best for Budget-Conscious Drivers
Geico Overview
AM Best financial strength rating: A++
Better Business Bureau (BBB) rating: A+
Keep reading: Geico Insurance Review
Why We Picked Geico
Geico provides cheap car insurance for young adults in nearly every state. The company has an impressive list of car insurance discounts, including savings for good students, members of the military and drivers whose cars have standard safety features such as airbags and seatbelts.
USAA: Best for Military Members
USAA Overview
AM Best financial strength rating: A++
BBB rating: A+
Keep reading: USAA Insurance Review
Why We Picked USAA
Military members and their families can often find cheap car insurance for young adults from USAA. Though they are not officially ranked by J.D. Power due to their limited availability, the company performs extremely well with customer satisfaction, as seen by the fact that it scored among the top few companies in each U.S. region in the J.D. Power 2023 U.S. Auto Insurance Study℠. That’s in addition to affordable premiums, which are some of the lowest on average in many states.
State Farm: Best Customer Experience
State Farm Overview
AM Best financial strength rating: A++
BBB rating: C-
Keep reading: State Farm Insurance Reviews
Why We Picked State Farm
State Farm is known for its great discounts for teen drivers, and the company stands out with young adults as well. On average, it offers motorists in multiple states the cheapest car insurance prices. On top of that, State Farm is well regarded for its local insurance agents.
Progressive: Best for Tech-Savvy Drivers
Progressive Overview
AM Best financial strength rating: A+
BBB rating: A
Keep reading: Progressive Insurance Reviews
Why We Picked Progressive
It’s difficult to find cheap car insurance for young adults in states such as Massachusetts, Michigan and New York, but Progressive tends to be an affordable option. Those in other parts of the country regularly find competitive rates as well, especially if they’ve been flagged as high-risk drivers. It’s smart to turn to Progressive if there’s an at-fault accident or a DUI on your driving history.
How To Get Cheap Car Insurance for Young Drivers
If you’re a young adult, prices for auto insurance may look somewhat alarming at first glance. However, there are ways to limit the cost of coverage. We’ll explain six of the best methods below.
Reduce Your Coverage Limits
Lowering your car insurance coverage leaves your car and finances less protected, but it can help you get the cheapest auto insurance on the market. You’ll likely be required to carry bodily injury liability coverage and property damage liability insurance. In some states, minimum coverage may be more extensive than that.
However, you’ll pay higher rates if you add optional types of insurance such as comprehensive or collision coverage. In certain states, uninsured motorist coverage isn’t required either, and in most states, medical payments coverage (MedPay) isn’t.
Drivers with add-on coverages such as roadside assistance, rental car reimbursem*nt and accident forgiveness could decrease their insurance costs by cutting them out.
Increase Your Auto Insurance Deductible
It’s much easier to find cheap car insurance for young adults if you choose a higher deductible on your policy. This means you’ll pay more out of pocket if you file a claim. It’s up to you whether you’d rather pay more up front for coverage or risk having to pay extra down the road.
Bundle Your Insurance Policies
If you’re paying for homeowners or renters insurance, bundling your car’s existing policy with these coverages could get you lower rates for each policy. Since you’ll need protection for both your vehicle and the place you live, it’s a smart move to lower the cost of car insurance by using the same provider.
Raise Your Credit Score
In most states, auto insurance providers can use policyholders’ credit scores to help determine their rates. You’ll pay considerably more for your own policy if you have bad credit compared to someone with a better score.
Improving your credit score takes time, but it can be done. You’ll save on more than just car insurance if you have good credit, as lenders will generally offer you lower interest rates on loans and lines of credit.
Compare Car Insurance Quotes
It’s far easier to find cheap car insurance for young adults if you get free quotes from multiple providers. Reaching out for car insurance quotes will help you see whether you’re being given fair rates.
Enroll in a Telematics Insurance Program
With telematics insurance, also known as usage-based insurance, your auto insurance provider tracks your driving habits through a mobile app or similar tool. If you drive safely or don’t put many miles on your car, you could earn a discount on your premium. But keep in mind that activity such as speeding could lead to higher rates with some usage-based insurance programs.
Ask an Expert: What tips would you offer to young drivers when shopping for affordable car insurance?
“One way to reduce insurance costs is to increase the deductible or decrease the collision insurance coverage.
Older vehicles may not have much residual value and therefore, the owner could consider eliminating collision insurance. Of course, if there is an accident, repairs will be [paid for] out of pocket. This is only viable for older vehicles with limited resale value.”
“First and foremost, I would highly suggest that young drivers join their parent’s auto insurance policy if possible.
If you do so, you can take advantage of the discounts and benefits your parents are already receiving, such as reduced rates for being a long-time customer.
If you’re shopping for an individual discount, there are several common ones you can inquire about with your agent. Comparing different insurers and their prices, along with their available coverage options, can result in significant savings.”
Insurance Discounts for Young Drivers
Some of the car insurance discounts available to you may depend on whether you live with your parents or are enrolled in college full time. Consider these potential savings opportunities.
While discounts for good grades won’t be available once you graduate from college, there are still savings opportunities. Consider these potential car insurance discounts:
- Multi-car discount: You may be able to get a multi-car discount with your parents if you live with them. If you have a domestic partner or a spouse, you can get this discount if you share a car insurance policy with that person.
- Good student discount: If you’re still a high school or college student, the best rate could be found by getting a good student discount for maintaining at least a B average.
- Safe driver discount: Those who go multiple years without speeding tickets, DUI violations or at-fault accidents could be rewarded for their safe driving practices with lower car insurance premiums.
- Vehicle safety discount: The cost of auto insurance coverage could decrease if you own a vehicle with working air bags, anti-lock brakes and anti-theft devices.
- Affiliation discounts: Young adult drivers get discounts for being military members, federal employees or graduates of certain universities. Consider your affiliations to discover whether you could take advantage of these savings.
Nick Christensen, an agent with Goosehead Insurance, advises, “Applying discounts to your auto insurance is an excellent way to lower a young driver’s expenses. Although each insurance provider offers different discounts, there are several common ones you can inquire about with your agent, including good student discount, away from home discount, alumni discount and taking a driver safety course.”
While defensive driving courses are helpful for improving your driving habits, most insurers only offer discounts to motorists who are over 50 years old. Young drivers could still benefit by learning to safely navigate the road, which can help them maintain clean driving records.
Our Experts
Alan Amici
Alan Amici is president and CEO of the Center for Automotive Research (CAR). He has over 35 years of experience in the automotive industry, previously holding leadership positions in engineering, manufacturing and service at Chrysler and TE Connectivity.
Nick Christensen
Nick Christensen is an agent with Goosehead Insurance, where he’s worked since 2015. He has nine years of prior experience in the insurance industry and is licensed in Idaho, Washington, Colorado, California and Oregon.
Barry P. Goldberg, J.D.
Barry P. Goldberg is the principal of Goldberg Injury Lawyers. He has practiced as a personal injury lawyer in Southern California for over 35 years and received his Juris Doctor from Loyola Law School.
Kristin Pettway
Kristin Pettway is the executive director of DRIVE SMART Virginia, where she’s worked since 2009. She manages the organization’s trucking programs, teen driving initiatives, traffic safety campaigns and the annual Distracted Driving Summit.
Cheapest Car Insurance for Young Drivers: The Bottom Line
Young adult drivers can expect to pay significantly less for car insurance than teen drivers. However, rates are still higher for drivers in their 20s than those in their 30s. The best way to ensure you get the cheapest car insurance is by reaching out to multiple providers for quotes.
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Cheap Car Insurance for Young Drivers: FAQ
Below are frequently asked questions about cheap car insurance for young drivers:
Geico, USAA and State Farm typically have the cheapest auto insurance for young people. Compare car insurance quotes from providers to make sure you’re receiving the best possible rate.
You may have heard newer cars cost more to insure. However, the cost of car insurance depends on many factors, including the make and model of the vehicle you purchase.
Yes, car insurance is much cheaper when you’re 25 than when you’re in your teenage years or early 20s. Prices continue to drop as you move toward 30 years.
New drivers often find affordable rates from Travelers, Geico and USAA. Students often turn to State Farm for the company’s car insurance discounts for those attending high school or college.
Geico, USAA, Travelers and Progressive are some of the best auto insurance providers for young adults because of their relatively good rates, discount opportunities and reputations for excellent customer service. Get free quotes from companies before making a decision on coverage.
Auto insurance is expensive for young drivers because they lack experience on the road, statistically get involved in more accidents than the average motorist and are more likely to speed excessively and drive while intoxicated by alcohol or drugs.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
- Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
- Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.
Our credentials:
- 800 hours researched
- 130+ companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at [email protected].
