If you're a younger driver under the age of 25, you're going to pay more for car insurance than older drivers. This is mostly because car insurance companies view young drivers as high-risk due to the lack of experience driving. There are ways to keep your premium costs low, however. Comparing quotes, taking advantage of discounts available and getting on another family member's policy can all go a long way towards reducing your coverage costs.
In this article
The best car insurance companies for young drivers
Young drivers looking for car insurance are going to face a major hurdle where price is concerned, due to their high-risk status. Fortunately, auto insurance providers offer a wide array of discounts in order to stay competitive. When looking at car insurance companies, we found the following stand out in terms of discounts:
GEICO: Overall best for discounts
For young drivers looking for the best combination of discounts, GEICO offers the most comprehensive discount set. For example, if you're a student with a good grade record, you may be eligible for its good student discount. This can save you up to 15% on your car insurance. If you can keep a clean driving record for five consecutive years, you could save up to 25% with GEICO's good driver discount.
GEICO also has discounts for members of various groups. If you belong to an honor society, fraternity or sorority, there may be a discount for you.
State Farm: Best for good students
If you are 16 to 25 years old, are a full-time student and maintain a 3.0 GPA, you could qualify for State Farm's good student discount of up to 25%. This is the highest good student discount available.
This discount may also be available if you've been ranked in the top 20% of your class, or have qualifying home school test scores. Furthermore, the discount stands after you graduate and until you turn 25.
Allstate: Best for bundling
If you bundle a renters, condo or home insurance policy with your car insurance, you can save up to 10% with Allstate on your auto coverage and up to 25% on your insurance for where you live.
Erie: Best for young drivers living with their parents
Erie offers a youthful driver discount for unmarried drivers under 21 living with their parents. This discount is usually dependent on your parents or guardian carrying an Erie car insurance policy for a set number of consecutive years. Also, if you were previously listed as a named driver on a family member's or a guardian's Erie car insurance policy, you could qualify for its youthful longevity discount.
Compare car insurance quotes to get your best rate
How much is car insurance for drivers under 25?
We've found that how young a driver is plays a direct role in the cost of their car insurance:
- 16-year-old drivers pay an average of $501 a month for car insurance
- 20-year-old drivers pay $243 a month
- 25-year-old drivers pay $126 a month
| Company | 16 | 17 | 18 | 19 | 20 | 25 |
|---|---|---|---|---|---|---|
| Allstate | $473 | $382 | $317 | $230 | $207 | $128 |
| American Family | $357 | $284 | $293 | $222 | $209 | $112 |
| GEICO | $364 | $329 | $300 | $225 | $195 | $122 |
| Nationwide | $473 | z$475 | $466 | $389 | $332 | $156 |
| Progressive | $576 | $520 | $451 | $264 | $227 | $119 |
| State Farm | $317 | $280 | $244 | $204 | $184 | $104 |
| Travelers | $1,236 | $970 | $767 | $530 | $461 | $183 |
| USAA | $215 | $205 | $175 | $137 | $131 | $82 |
| Average | $501 | $431 | $377 | $275 | $243 | $126 |
| Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary. | ||||||
On average, USAA has the cheapest car insurance rates for young drivers, starting with an average of $215 a month for 16-year-olds. However, it should be pointed out that USAA only provides car insurance for military members and their families. Otherwise, State Farm has the best rates for young drivers, followed by American Family.
The key to getting the cheapest rates as a young driver is to compare auto insurance quotes from several companies. Start with State Farm, American Family and USAA (if you're eligible), and then go from there.
How can drivers under 25 get cheap car insurance?
Your age isn't under your control, but there are other factors that you can manage towards keeping your car insurance rates low, including buying the right amount of coverage and maintaining a clean driving record.
Choose the right coverage
If you have an older, used car then you may not need full-coverage car insurance. A car starts depreciating in value the second it goes off the lot. If it has many years and miles on it, it may not be worth what it would cost to get collision and comprehensive coverage.
If you do need comprehensive and/or collision insurance, avoid getting more coverage than you actually need to keep from overpaying. Factors to look at when calculating the coverage you require along with saving you money include:
- The make and model of your car
- How frequently you drive
- Your budget
- The deductible you choose
- Crime rate and weather where you live
You may just need your state-required liability insurance limits, as drivers under 25 usually do not have as many assets to protect as older drivers do.
Maintain a good driving history
Simply put, have as few tickets and accidents on your driving record as possible. Even one ticket can stay on your insurance record for five to seven years, and you could see the associated premium increase that comes with it for that amount of time as well. Maintain a clean driving history, and you should see your rate drop as time goes on.
Get on a family member's car insurance
A good way to significantly lower your car insurance is to get added onto a family member's or guardian's auto insurance. You'll benefit from them already having a policy. While their overall rate will increase, it should still be cheaper than both you and them having separate coverage.
Shop around
To make sure you're getting the best coverage at the cheapest price, compare car insurance quotes from multiple companies. Looking at many quotes side by side allows you the opportunity to see who offers the cheapest rate for the coverage options you need.
References:
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