Car insurance for 20 year olds

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Looking for affordable car insurance for a 20 year old? Cheap car insurance for 20 year olds isn’t the easiest thing to find, but there are ways to lower your monthly premium if you know what you’re doing. Here’s what you need to know.

Cheapest car insurance for 20 year old drivers

Company Average Annual Rate for 20 year old drivers
Erie $1,996
USAA $2,444
Geico $3,005
AAA $3,335
Travelers $3,347

Erie

Erie is easily the most affordable car insurance company for 20 year olds. It doesn’t offer very many discounts to its members, but, as you can see, that’s because it doesn’t have to. However, it’s not just a cheap car insurance company. In 2020 it received a ranking of 850 out of 1,000 from J.D. Power, getting beat only by the likes of State Farm which received 855 out of 1,000 in the Mid-Atlantic.

USAA

USAA is kind of a niche auto insurance company in that it only serves current and retired military as well as their immediate family members. If this applies to you, give it a shot. USAA routinely scores well above its peers with J.D. Power (but is disqualified from ‘winning’ because of the military requirement). You can save even more with USAA when you bundle your car insurance with home insurance, too.

Geico

Geico offers affordable car insurance without discounts, but you can really save on your premium when you take advantage of the numerous discounts that it offers. Geico also has a top notch mobile app (for both Android and iOS) where you can pay your bills, file a claim, request roadside assistance and check the status of your claim.

AAA

AAA requires you to join before you can get access to its car insurance program, but once you do it’s well worth it. Not only will you get access to awesome roadside assistance coverage (something every 20 year old needs but doesn’t have), but you’ll also get access to affordable car insurance with numerous discounts. No, it’s not the cheapest on this list, but it might just be the most comprehensive.

Travelers

Travelers auto insurance has a lot of discounts that many 20 year olds can take advantage of as soon as they join, which will take the monthly price down quite a bit (you can take a look at their discounts here). Travelers also routinely scores well with J.D. Power where in 2020, it received a score of 828 out of 1,000.

Cost of car insurance for a 20-year-old

Across the nation, the average cost of car insurance for a 20 year old is $3,592 a year. Therefore, depending on where you live, you may more or less than this amount.

Here’s a breakdown of the average cost per state:

State Average Cost for a 20 Year Old
Alaska $3,458
Alabama $3,057
Arkansas $2,947
Arizona $3,225
California $3,549
Colorado $3,251
Connecticut $4,082
District of Columbia $3,701
Delaware $3,892
Florida $4,798
Georgia $3,318
Hawaii $1,150
Idaho $2,064
Illinois $3,348
Indiana $2,329
Iowa $2,016
Kansas $2,897
Kentucky $3,523
Louisiana $4,710
Maine $1,584
Maryland $4,144
Massachusetts $3,408
Michigan $6,536
Minnesota $3,057
Mississippi $2,960
Missouri $3,383
Montana $2,770
Nebraska $2,482
Nevada $4,628
New Hampshire $2,577
New Jersey $5,107
New Mexico $2,696
New York $5,392
North Carolina $1,470
North Dakota $2,670
Ohio $1,986
Oklahoma $3,065
Oregon $2,579
Pennsylvania $3,261
Rhode Island $4,450
South Carolina $2,784
South Dakota $2,709
Tennessee $2,478
Texas $4,360
Utah $2,795
Vermont $2,261
Virginia $2,247
Washington $2,320
West Virginia $3,368
Wisconsin $2,551
Wyoming $2,859

How 20 year old drivers can save money on car insurance

If you’re 20 years old and looking to lower your car insurance premium, you have a few strategies at your disposal to do so. Your best bet is to take advantage of discounts, but fortunately there are a few more things you can do.

Choose a high deductible

The fastest way to lower your premium is to choose a high deductible. Of course, this will lower the amount of help you’ll get should you get into an accident (thereby increasing the amount you’ll need to contribute), but it will stop you from having to pay more upfront.

Drive an older car

Newer cars cost more to insure than older cars because older cars don’t cost as much to replace. Opt for an older car and right off the bat your insurance will cost less than if you chose a new car.

Drive a car with a strong safety rating

Cars with solid safety ratings may not look as cool as other cars, but insurance companies love them. The reason? By keeping you safe, you and your passengers will be less likely to need major medical care after an accident— therefore possibly saving your insurance provider a lot of money in the event you do get into a collision.

Usage based car insurance

Not every company offers this type of auto insurance, so you will need to do a bit of research. However, if you don’t drive that often it’s worth a few minutes of your time. With usage based car insurance, you basically only pay for the days you actually drive. Think of it as prorated insurance.

With usage based car insurance, your insurance provider will look at such things as:

  • Miles driven
  • Time driven
  • Vehicle driven
  • Locations driven

Compare Insurance Rates

Most people don’t even think to do this because they assume all insurance companies basically charge the same amount. This couldn’t be further from the truth.
Each company looks at the following factors:

  • Type of car you drive
  • Where you live
  • How often you drive
  • Credit score
  • Coverage level
  • Marital status
  • Driving history
  • Insurance history
  • Annual mileage
  • Claims history

However, each company doesn’t weigh the importance of each factor the same way. For example, one company may consider your credit score to be the most important factor, while another is more concerned with your annual mileage. Unfortunately, companies don’t advertise their pricing formulas, so the best thing you can do is shop around and compare rates.

Improve your credit score

As a 20 year old, you haven’t had enough time to really develop a great credit score. However, that doesn’t mean you should just leave this variable alone because there are a few things you can do to help. Opening a credit card in your name and paying off the balance each month, or becoming an authorized user with someone who has a strong credit score are just some of the things you can do.

Improve your credit score and your insurance premiums will lower.

Discounts

Not every car insurance company offers the same discounts, so if you’ve been given a similar quote by multiple companies, take a look at the types of discounts they offer. Discounts can drastically lower your monthly premium.

Discounts a 20 year old might look at include:

  • Safe driver
  • Accident free
  • Defensive driving course
  • Low mileage
  • Good student
  • Away from home student discount
  • Military
  • E-bill
  • Paid in full
  • Auto-pay
  • Multi-policy
  • Anti-theft device

Frequently asked questions

How much is car insurance for a 20 year old?

How much you pay in car insurance varies by a lot of factors, such as which you state you live in, how often you drive, your gender and what type of car you drive. However, the average amount a 20 year old driver pays is currently $3,592 a year.

At what age will my rates go down?

Most people tend to see their rates go down by the time they turn 25 (assuming they’ve kept their driving record clean). However, each year it should go down a little bit until then.

Which state is the most expensive state for 20-year-olds?

Michigan is currently the most expensive state for 20-year-olds with an average annual premium of $6,536.

Which state is the cheapest state for 20-year-olds?

Hawaii is the cheapest state for auto insurance for 20-year-olds. Currently, the average annual premium is only $1,150.