Car insurance rates increase the most for young drivers in 2023. So, we’ve searched for the companies with the lowest average rates for young drivers and after getting to know the details, here we present a detailed overview about the best car insurance for young drivers for you.
We will help you to find a car insurance plan that offers affordable rates and adequate coverage. Therefore, we have prepared this article after considering all factors including coverage options, policy features, specific discounts, user ratings and NAIC (National Association of Insurance Commissioners) reports.
To decide the average cost of car insurance for young drivers in the United States, analyzing data for drivers bankrate adds to their parents’ policy as well as drivers’ own policy. Remember, your rate may vary based on those mentioned factors and others reasons.
A driver’s age is one of the major reasons to affect premium rates, except in Massachusetts or Hawaii. Where age is not accepted to be used as a factor for calculating insurance premiums rates. While teens tend to pay the highest rates, the drivers between the ages of 20 and 25 are still paying sufficient average premiums. For example, at the age of 20 drivers give 56% more for full coverage than the national average insurance premium of $2,014 each year. Although, at the age of 25 driver average premium rates are significantly reduced. Moreover, they tend to change less roughly from year to year.
Young driver auto insurance costs are fairly higher than adults, because younger drivers are mostly inexperienced, they are more likely to cause accidents. According to premium rates from most of the providers of our analysis, parents adding a new, teen or young driver to their auto policies will see an average cost increase of $2,182 a year, basically doubling auto insurance expenses.
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Key Takeaways
- Young drivers always have low level experience behind the car driving journey. Because of that, there will be more likelihood to get into accidents and file claims. As a result, most of the car insurance providers claim the highest rate for teens and young drivers.
- Teens or young drivers most of the time want to get car insurance quotes from Erie, Auto-Owners, Geico, Progressive, State Farm and Nationwide due to cheap average premiums coverage options.
- Therefore, You are choosing a company with a lot of discounts and which the average rate is cheapest, you can easily take up premium coverage from a lower rate.
Best Car Insurance for Young Drivers
The best car insurance companies for young drivers are Erie, Geico, State Farm, Auto-Owners, Nationwide and Progressive, it is known from bank rate relevant research. We are reviewing average premium data from QIS (Quadrant Information Services) for best car insurance for young drivers. After, we’ve started our analysis for you.
1. Erie Auto Insurance
Erie auto insurance has some of the most wide-range policies, compared to other car insurance companies. Among includes locksmith services, pet coverage, auto glass repair coverage and others from Erie car insurance. Also, Erie offers plenty of unique insurance products, like a new car protection coverage, rate lock guarantee and free FAF (first accident forgiveness) etc.
2. Geico Car Insurance
Geico is one of the largest auto insurance companies in the U.S., it is mostly known for affordable premiums coverage and liberal discounts options. The company offers a savings policy for smart students, military personnel, affinity groups and others.
Geico insurance company is owned by Berkshire Hathaway, which has a multinational holding company in the USA that is headquartered in Omaha.
3. State Farm Auto Insurance
State Farm is one of the biggest car insurance companies in the United States of America, which has almost 16% share of the total in the market. State Farm offers lots of coverage discounts for young car drivers, among one of the best is Steer Clear safe driver program, they provide it for drivers under 25 exclusively.
State Farm includes plenty of the other insurance products, such as: homeowners, renters, life insurance, condo pet medical insurance and more. They are adding these policies with your car insurance policy that for you can save up to 17% premiums. State Farm’s website claims you can save on average annual cost up to $1,127 per year, when you bundle your auto and home insurance policy.
4. Allstate Car Insurance
Allstate Car Insurance is the best option for young drivers, who are purchasing auto insurance for the first time. They can get a lot of the advantage from Allstate helpful online tools and resources, like a car payments calculator and coverage calculator.
Allstate also always offers a good selection for young drivers from discounts programs. The company has an A+ rating based on car insurance from financial strength AM Best.
5. Progressive Auto Insurance
Who are looking for the best discount auto insurance company for young drivers, Progressive is perfect for them. The company has discounts for claim-free drivers, smart students, distant students, enrolling in autopay, getting a quote online and more.
Also, Progressive especially offers a “Safe Driver Rewards” program for young drivers, which is called Snapshot, which yields an annual average savings of $146.
Most of the specialists recommended the Progressive as the best option for younger drivers. The company received a 9.0 out of 10.0 rating from the MarketWatch insurance review team. They gave this rating score based on five tough performance criteria, which are: reputation, availability, premium cost, coverage and customer satisfaction experience.
6. Nationwide Auto Insurance
If You want to customize an auto insurance policy with endorsements, Nationwide insurance may be a great choice for them, like free FAF (first accident forgiveness). Nationwide also offers an invisible deductible option for young drivers, who remain claim-free of traffic cases. You can earn a minimum $100 up to $500 discount from each claim-free year.
Nationwide has an overall 4 number position with Geico of auto insurance compared to other companies in 2024. The company is also tied with other three car insurance providers at No. 4 in the Customer Service subcategory.
Nationwide auto insurance annual average premium rate is $1,473, otherwise the national average rate is less than $1,547. It does have some of the lowest rates options for young drivers with poor credit. The company offers lowest average rates for some drivers, including female senior drivers.
7. Farmers Car Insurance
Farmers is an excellent car insurance company with multi coverage options. You can get a guaranteed valuable coverage, customized equipment coverage, full windshield and glass coverage, loss of use coverage , accident forgiveness and OEM coverage, depending on your living location.
Farmers car insurance rates are more expensive than the national average rate. Whether you’re a young driver or a driver with a history of accidents or tickets with poor credit, you can expect to pay high prices for full car insurance coverage from Farmers.
Farmers also offer notable expenses for young and senior drivers. Every young adult driver can expect to pay $5,225 per year, or $435 per month, for those who are aged 18 to 25. That’s 41% more than the national average. Senior drivers pay an annual average of $3,199 each year, who are aged 65 to 80. They are paid over the national annual rate for drivers in this age group 49% increase.
8. USAA Car Insurance
USAA is one of the high rated car insurance providers in the U.S., It has an exceptional rule for buying car insurance coverage that they are the only one whose family member has worked in the military. Also, the USAA offers issues coverage to students at U.S. Service Academies and ROTC programs.
The USAA Car insurance coverage rates tend to less than as drivers age, making it for this group substantially drop for young drivers. USN (US News) research expert team analysis found low rates with USAA for a female age of 18 to 25 group to be about $500 less per year than the national average rate and roughly $600 less for a male of the same age.
USAA has the cheaper rates for both genders, it proved is lower than any other car insurance providers in their analysis team. At the other end of the scale, Farmers car insurance rate to be the most expensive for the insurers group, they are charged averaging $2,385 for a 25 female and age of $2,594 male.
9. Travelers Auto Insurance
Travelers is a car insurance provider of the insurance companies in the U.S., who expect $1,456 per year premium for a young female driver, while their sample rate is $1,512 for a young adult male driver. Every rate is $302 and $348 respectively lower next year from the national average premium.
10. Auto-Owners Car Insurance
Auto-Owners car insurance is a good option for young drivers. The company offers competitive rates for teens drivers, including those with a new or student on their record. However, we evaluated rates are less competitive when compared to other companies. Auto-Owners expect an average $3,382 per year for young drivers, who are aged 18 to 25.
According to data provided by the NAIC to Auto-Owners car insurance has a very low level of customer complaints. A poor level of insurer complaints can indicate a biggest satisfaction number among other customers.
11. American Family Car Insurance
American Family is a popular insurance Company, who has a medium budget for premium. A young age of 18 female driver can give to pay average rate $1,617 for per year for a policy from American Family, or less than the overall $141 from national average. A young under 25 year male driver will pay average $1,663 rate of a year, less than of $197 when compared to the national average.
How are car insurance rates for young drivers determined?
Car insurance rates for young drivers are calculated in the same way as they’re for senior drivers. There are a number of factors that are taken into account when determining car insurance rates for young drivers, including:
1. Driver Age: Driver age plays a primary role for taking car insurance coverage for teens. Most insurance providers expect higher rates if the driver is under 25 years of age. Because most of the drivers under 25 don’t have enough experience which may make them more likely to get into accidents and file claims.
2. Location: Third factor is your living location for determining a car insurance coverage rate. There is a high possibility of damage caused by natural disasters, theft or vandalism and road accidents, if you live in such an area then you can pay more for coverage. In addition, all the states have a different variety of auto insurance laws that may affect insurance premiums.
3. Car values and range: Which type of your car, particularly how much the car brand, model, price and how much it will cost to repair, is everything affected in premiums. Older version cars with lower prices and those that are cheaper to fix after an accident are usually inexpensive to insure than others.
4. Credit: Most of the states allow insurance coverage to use your credit based policy score when calculating insurance plan rate. Poor credit people always pay much higher rates than consumers from good credit .
Remember, that California, Massachusetts and Hawaii ban the use of credit as a factor in determining insurance rates. Michigan’s car insurance companies don’t allow actual credit rating, but you can use factors that go into credit rating.
5. Gender: Males are statistically more likely to have accidents than Females and the accidents are more often serious. So, Males are may generally pay higher rates for car insurance than females, even while they have previous clean driving records. But, you can not use gender as a rating factor in Michigan, Pennsylvania, California, Hawaii, North Carolina and Massachusetts.
6. Types, range and amount of coverage: Which types and range of coverage you purchase also affect the premiums rates. Cheaper levels of coverage and buying only liability protection will usually be less than buying collision and comprehensive car insurance.
Notable that insurers will generally tell you to buy collision and comprehensive coverage. Although, most of the insurers suggest buying more than the minimum amount to better protect your finances.
7. Mileage: People who use their cars sometimes as a hobby or special need can often rate less than those who use them more. Because the more that they drive, the more time they have on the road, the more likely they are to have an accident.
8. Deductible: Certain insurance coverage types will affect your deductible that determines how much you may pay. Biggest deductibles amount mean less premiums, but you will pay the largest amount from your pocket after an accident, so you will always be ready to carry a financial risk. Most insurance experts do not recommend it.
Read also: Top 10 Cheapest Car Insurance Reviews
Average Cost of Best Car Insurance for Young drivers by Company and Age
Age is a primary critical factor in determining car insurance premiums for young drivers. Every insurer has different insurance rates, including different minimum coverage requirements that can impact the rates set by every insurance company.
In addition, the risk of getting into an accident may vary by age, including your insurer, range or even average annual car insurance cost for parents with a young driver.
Average annual cost of car insurance for young driver with parents
| Company Name | Age of 16 | Age of 17 | Age of 18 | Age of 19 |
|---|---|---|---|---|
| Erie | $4,059 | $3,854 | $3,753 | $3,621 |
| Geico | $4,471 | $4,129 | $3,890 | $3,567 |
| State Farm | $5,034 | $4,659 | $4,378 | $4,099 |
| Allstate | $8,296 | $7,922 | $7,767 | $7,540 |
| Progressive | $5,088 | $5,169 | $4,766 | $4,368 |
| Nationwide | $4,502 | $4,427 | $4,352 | $4,058 |
| Farmers | $7,349 | $6,956 | $6,634 | $6,184 |
| USAA | $4,103 | $3,462 | $3,108 | $2,766 |
| Travelers | $5,065 | $4,348 | $4,010 | $3,615 |
| Auto-Owner | $5,412 | $4,963 | $4,738 | $4,514 |
| American Family | $5,663 | $5,228 | $5,110 | $4,537 |
How Much is Car Insurance Average Rate for Young drivers under 25 years old?
A young driver’s age is one of the sizable factors to affect rates of average premium for coverage, without Hawaii and Massachusetts. There you can’t use the age factor for calculating car insurance premiums. Although teens tend to pay the highest rates for insurance, drivers between the ages of 20 and 25 are still paying the biggest amount of average premiums.
| Age | Average Minimum Coverage for a Year | Average Full Coverage for a Year |
|---|---|---|
| Age of 20 | $995 | $3149 |
| Age of 21 | $868 | $2763 |
| Age of 22 | $955 | $3164 |
| Age of 23 | $896 | $2985 |
| Age of 24 | $850 | $2837 |
| Age of 25 | $747 | $2473 |
How much does auto insurance cost for a young driver by location?
Typically, a young driver is thought to be an individual under the age of 20 to 25. But, car insurance premium rates may vary, especially based on age. No. 2 location, major factor that affects the premium cost rate of auto insurance for young drivers. For example: In California, the average full coverage rate for a 21 year old is $3,205 per year.
In the table below, you can see the average cost of auto insurance for young drivers in states, based on data from Bankrate.
| State | Age 20 | Age21 | Age 22 | Age 23 | Age 24 | Age 25 |
|---|---|---|---|---|---|---|
| Alaska | $3,072 | $2,644 | $3,148 | $2,942 | $2,813 | $2,359 |
| Arizona | $2,916 | $2,673 | $2,902 | $2,727 | $2,605 | $2,214 |
| Alabama | $2,857 | $2,585 | $3,055 | $2,904 | $2,743 | $2,298 |
| Arkansas | $3,008 | $2,577 | $2,955 | $2,818 | $2,683 | $2,429 |
| Colorado | $3,566 | $3,237 | $3,386 | $3,195 | $3,048 | $2,591 |
| California | $3,539 | $3,205 | $3,478 | $3,301 | $3,093 | $2,884 |
| Connecticut | $2,338 | $2,088 | $2,618 | $2,452 | $2,319 | $2,011 |
| Delaware | $3,198 | $2,771 | $3,314 | $3,154 | $3,017 | $2,531 |
| Georgia | $3,287 | $2,885 | $3,330 | $3,141 | $2,994 | $2,646 |
| Florida | $5,017 | $4,241 | $4,944 | $4,684 | $4,531 | $4,018 |
| Hawaii | $1,332 | $1,309 | $1,327 | $1,327 | $1,327 | $1,327 |
| Iowa | $1,940 | $1,744 | $2,070 | $1,979 | $1,907 | $1,620 |
| Illinois | $2,938 | $2,599 | $3,103 | $2,890 | $2,745 | $2,289 |
| Idaho | $1,725 | $1,507 | $1,864 | $1,769 | $1,706 | $1,433 |
| Indiana | $1,991 | $1,763 | $2,096 | $2,036 | $1,907 | $1,603 |
| Kentucky | $3,261 | $2,826 | $3,569 | $3,414 | $3,229 | $2,701 |
| Kansas | $2,810 | $2,549 | $2,923 | $2,814 | $2,730 | $2,317 |
| Louisiana | $4,443 | $4,003 | $4,622 | $4,365 | $4,144 | $3,593 |
| Maryland | $3,285 | $2,846 | $3,266 | $3,009 | $2,804 | $2,436 |
| Missouri | $3,020 | $2,657 | $3,167 | $3,013 | $2,877 | $2,393 |
| Minnesota | $2,505 | $2,268 | $2,728 | $2,574 | $2,471 | $2,139 |
| Maine | $1,578 | $1,307 | $1,624 | $1,554 | $1,487 | $1,233 |
| Massachusetts | $1,965 | $1,835 | $1,661 | $1,602 | $1,488 | $1,438 |
| Mississippi | $2,617 | $2,304 | $2,786 | $2,655 | $2,531 | $2,240 |
| Michigan | $4,770 | $4,090 | $4,366 | $4,054 | $3,878 | $3,102 |
| Montana | $2,949 | $2,417 | $3,099 | $2,886 | $2,784 | $2,159 |
| New Jersey | $2,769 | $2,452 | $2,963 | $2,743 | $2,603 | $2,244 |
| Nevada | $4,541 | $4,055 | $4,460 | $4,108 | $3,947 | $3,420 |
| New York | $4,651 | $4,020 | $4,642 | $4,335 | $4,140 | $3,661 |
| Nebraska | $2,336 | $2,090 | $2,549 | $2,432 | $2,352 | $1,973 |
| New Mexico | $2,312 | $2,132 | $2,493 | $2,387 | $2,276 | $1,990 |
| North Carolina | $1,669 | $1,602 | $1,610 | $1,591 | $1,557 | $1,530 |
| South Carolina | $2,283 | $1,998 | $2,449 | $2,321 | $2,215 | $1,919 |
| New Hampshire | $2,011 | $1,667 | $2,145 | $2,051 | $1,950 | $1,655 |
| North Dakota | $1,836 | $1,744 | $1,980 | $1,841 | $1,765 | $1,570 |
| Oklahoma | $3,017 | $2,772 | $3,085 | $2,903 | $2,761 | $2,429 |
| Oregon | $2,146 | $1,974 | $2,207 | $2,088 | $1,996 | $1,735 |
| Ohio | $1,991 | $1,766 | $2,179 | $2,037 | $1,897 | $1,630 |
| Pennsylvania | $3,441 | $2,886 | $3,383 | $3,191 | $3,011 | $2,438 |
| Rhode Island | $2,977 | $2,580 | $3,073 | $2,840 | $2,728 | $2,342 |
| South Dakota | $2,180 | $2,112 | $2,293 | $2,152 | $2,083 | $1,831 |
| Texas | $3,379 | $2,783 | $3,210 | $3,031 | $2,867 | $2,439 |
| Tennessee | $2,332 | $2,094 | $2,427 | $2,269 | $2,102 | $1,855 |
| Utah | $2,592 | $2,265 | $2,501 | $2,342 | $2,206 | $1,853 |
| Vermont | $2,070 | $1,645 | $1,848 | $1,746 | $1,692 | $1,345 |
| Virginia | $2,348 | $1,978 | $2,502 | $2,345 | $2,224 | $1,872 |
| West Virginia | $2,370 | $2,128 | $2,550 | $2,395 | $2,241 | $1,927 |
| Washington | $2,302 | $2,045 | $2,389 | $2,223 | $2,113 | $1,816 |
| Washington D.C. | $3,160 | $2,949 | $3,254 | $3,040 | $2,854 | $2,500 |
| Wyoming | $2,297 | $2,126 | $2,584 | $2,408 | $2,308 | $1,862 |
| Wisconsin | $1,985 | $1,831 | $2,062 | $1,951 | $1,860 | $1,615 |
Discounts of Car insurance for young drivers
Often, all the car insurance companies offer a lot of discounts for young drivers, such as: Safe driving tools. Explore a company that offers the most discounts that apply to your circumstances. It’s important! because it may be the best way to get cheap auto insurance coverage.
1. Safety training: Almost all of the car insurance companies offer various discounts to students or new young drivers who have completed a driving course from an approved driver training institute. Actually, these courses protect defensive driving and can help to reduce the possibility and severity of accidents. As a result, the insurer has to pay less after the accident.
2. Multiple car discounts: When you add more than one vehicle to a single policy, almost every car insurance company provides a roughly discount. It does not on average affect the cost of policy for each car. Overall, the cars are cheaper to insure together.
3. Multi-policy discounts: For those who own a car and a house, insuring both at the same time, insurers offer a small discount.
4. Alumni association discounts: Some of the car insurers offer alumni association discounts for young drivers, who are recently complete college graduates. If you want details to ask a local agent of your insurer.
5. Good student discount: It is a common discount for young drivers from discounts for students. If you are a high school or college student and have a minimum GPA, you can generally earn the car insurance discount.
6. Usage discounts: You can get a discount based on how often you drive. These are relatively new discounts programs. It depends on a mobile application or plug-in device to track your car usage mileage and driving experience, such as acceleration, braking and speed. A good driving record can land you a bigger discount.
7. Membership savings: If you are a member of AAA, credit unions, auto clubs, employers, military or other members of the same organization’s members. Overall, you can earn affinity discounts for your car insurance.
8. Distant student discount: For students who attend college far away, who may be able to land a discount if you use a car for going to college or university. To get the discount, they typically must be listed on their parents’ policy to take advantage.
Methodology
Before we find out the best car insurance for young drivers and teens, we analyze average monthly and annual rates published on insurers’ official websites. In addition, we researched details about all the top rated auto insurance companies for young drivers based on their standout features, like age wise high and low rates, coverage options, gender wise rate, monthly and annual rate, discounts, different location rate etc.
Remember, all the coverage rates presented here are meant to help young adults perfectly understand how much you may be paying for coverage. Although you know that—average rates are customized based on some primary factors, like driver age, claim history, car driving record, location, gender etc.
Finally, you will need to apply for car insurance quotes to see how much you will pay based on your driver profile and coverage requirements. Then, you should meet with the company’s local agent to finalize your coverage.
Daniel Jack is a senior finance and insurance writer and analyst at The US Pedia. For more than 8 years, he has been helping consumers learn about the finance, insurance and banking related. Daniel enjoys translating the complexities of insurance into easy-to-understand advice and tips to help consumers make the best choices for their needs. He completed his MBA (Master of Business Administration) from the University of Chicago.