Looking for affordable car insurance as a 21-year-old? Bankrate has you covered. Young drivers pay some of the highest insurance premiums of any age group. Insurance companies typically view this demographic as high-risk drivers, as they are recently licensed and don’t have many years of experience behind the wheel. However, as a 21-year-old, you have the benefit of being a little older, and may start to see your car insurance premiums decrease compared to a newly licensed teen driver.
By shopping around with different insurance carriers, it’s possible to find competitive car insurance as a 21-year-old. To help you get started, Bankrate looked for the best auto insurance companies, which included an analysis of average premiums for 21-year-olds on their own policies using rate data from Quadrant Information Services. We broke down that data by gender and company to help you find ways to save on your premium. We also analyzed the providers based on customer satisfaction, digital app accessibility, coverage offerings and discounts, so that you can find the best car insurance for your needs.
How much is car insurance for a 21-year-old
Based on a review of quoted annual premiums from Quadrant Information Services, 21-year-old drivers pay an average of $2,967 per year for full coverage car insurance. This is almost $1,300 more than the national average annual full coverage premium of $1,674. Minimum coverage for 21-year-olds costs $874 per year, also higher than the national average, which is $565 annually.
Car insurance prices are based on risk. If you are 21-years-old, you still have less driving experience than older drivers. To compensate for the increased risk of you causing an accident, car insurance companies typically charge a higher rate if you are younger. Statistically, your premiums should begin to decrease when you turn 25.
Average cost of car insurance for men vs. women
In most states, gender affects your car insurance rates. Regardless of age, men tend to have riskier driving behaviors than women, and that can lead to more accidents and more serious accidents. If you are a 21-year-old male, both your age and your gender may increase your auto insurance premiums.
There are several states that do not allow insurance companies to rate policies based on gender. These are California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania. This does not mean that in these states all 21-year-olds pay the same price; there are numerous other factors that determine how much your car insurance costs. But in these states, gender is not used as a rating factor, so your gender will have no bearing on how much you pay.
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Cheapest car insurance companies for 21-year-olds
Because car insurance tends to be relatively expensive for 21-year-olds, you may be searching for the cheapest car insurance company. While age is one of the biggest factors in determining premium, there are other factors, like the type of car you drive, the coverages you choose, the discounts you qualify for and your driving history.
Based on our analysis of the average premiums for the largest car insurance companies by market share, several stand out as offering low average rates to 21-year-olds. If you are looking for cheap car insurance for 21-year-old drivers, you may want to get a quote from the following companies:
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USAA offers the cheapest full coverage and minimum coverage premiums on our list, but the company only sells insurance to current and past military members and their immediate families. If you qualify for coverage, you may have access to cheap average premiums, excellent claims service and plenty of discounts. On top of the low average premiums, you may save money if you insure a new car, garage your vehicle on a military base, store your vehicle while you are deployed or spin your policy off from your parents’ USAA policy.
Learn more: USAA Insurance review
If you are looking for cheap coverage and a range of coverage options and discounts, Erie might be a good option. However, Erie is not a national carrier. You will only be able to purchase Erie’s auto insurance if you live in one of the 12 states that the carrier operates in. If you are eligible for coverage, Erie provides unique options on their standard auto insurance policy, like pet coverage and locksmith coverage. You might also be interested in the Erie Rate Lock feature, which keeps your premium from increasing unless you make certain changes to your policy, like adding a driver or vehicle or changing your coverage.
Learn more: Erie Insurance review
Geico is known for offering low average rates and a wide range of discounts, and this holds true for 21-year-old drivers. You might save for having certain safety features on your vehicle, being a good student or taking a driver’s education course. The company also offers a robust mobile app, which allows you to file claims, pay your bills, call for roadside service, view ID cards and make changes. However, Geico does not offer as many coverage options as some of the other companies on our list and only scores one point above industry average for claims satisfaction, as surveyed by J.D. Power. This could indicate room for improvement.
Learn more: Geico Insurance review
Travelers may be a good choice if you are searching for a highly customizable policy. In addition to the standard car insurance coverages, like liability, uninsured and underinsured motorist coverage, collision and comprehensive coverage, Travelers offers a long list of optional coverages to round out your policy. You may want to add roadside assistance coverage, gap coverage, rental car reimbursement, accident forgiveness or ridesharing coverage. If you are looking to save, Travelers offers numerous discounts that might lower your premium.
Learn more: Travelers Insurance review
Progressive might be a good choice if you are looking for digital tools. The company’s Name Your Price tool allows you to enter your monthly budget and then shows you several coverage options within your designated price range. You can also compare several companies right from Progressive’s website, which might make your car insurance search easier. Although Progressive’s average full coverage and minimum coverage rates for 21-year-olds is the highest on our list, the company also offers numerous discounts that might help you save. You could save for getting a quote and buying a policy entirely online, paying in full, being a good student or participating in the Snapshot safe driving program.
Learn more: Progressive Insurance review
How to save on car insurance for 21-year-olds
Although car insurance is, on average, more expensive for 21-year-olds than it is for older drivers, there are ways you may be able to save.
Car insurance companies all have different rating algorithms, meaning that they weigh your individual rating factors differently. Getting quotes from several companies allows you to compare the price for the same coverage limits. This is especially helpful to gauge which companies may be more competitive on price for young drivers. You may also discover that a particular company has features or tools that you enjoy, especially if you prioritize the ease and accessibility of a mobile app or if you want to use telematics to optimize your driving habits. Also be sure to ask about special discounts the company might offer that you could qualify for, including alumni discounts or even a professionals discount for certain occupations.
Take advantage of good student discounts
If you are under 25-years-old and a full-time student, many insurance companies offer a good student discount. The qualifications will vary by company, but most companies require that you maintain a B-or-better letter-grade average or a 3.0 or higher GPA. You may be asked to provide a copy of your most recent grades to qualify.
Take advantage of distant student discounts
If you are a college student who does not take a vehicle with you to campus, you may qualify for a distant student discount. Typically, you have to be at least 100 miles away from home to qualify, but this will vary by insurance carrier. You also must be listed as a driver on your parents’ policy to qualify for this discount. If you have a policy of your own, this will likely not be an option for you.
21-year-old drivers on their own policy pay an average of $2,967 per year for full coverage car insurance. If you are listed on your parents’ policy and take advantage of a distance student discount, your full coverage premium could go down to $909 per year, depending on the provider and how much they discount rates for distant students.
Drive an affordable vehicle
The type of car you drive has a huge impact on how much you pay for car insurance. Sports cars, luxury vehicles and vehicles that may be more expensive to repair or replace will generally result in higher premiums. There are some cars that are generally cheaper to insure than others. Based on Bankrate’s studies using data from Quadrant Information Services, the cheapest cars to insure with full coverage are the Honda CR-V, Hyundai Tucson and Ford F-150.
Improve your driving skills
Many insurers offer a discount to drivers who will agree to install a telematics device in their car or use a mobile app to track your driving. These programs record information about your driving skills, such as your speed, braking habits and the time of day you are driving. You could earn a discount based on the personalized data that the company receives regarding your driving habits.
How to get the best insurance for a 21-year-old
Finding the cheapest car insurance does not always mean you have found the best car insurance for your needs.
When shopping for insurance, first determine what you need and want from a policy. Do you want a company that has a strong mobile app? Are you looking for certain coverages, like comprehensive or collision coverage, or discounts? How strict is your budget? Everyone has different needs and wants when it comes to insurance.
Once you have decided what matters, you can get quotes from several companies to see which quotes best fit your needs. If you are not sure where to start, talking to a licensed agent might help you decide what coverages and options are right for you.
Frequently asked questions
Why is insurance more expensive for 21-year-olds?
Although you might have been driving for a few years, you are still considered inexperienced by most insurance companies. Your premium will depend on your individual rating factors, like the type of car you drive, the coverage you choose, the discounts you qualify for and your driving history. In general, average car insurance rates for 21-year-olds are higher due to the lack of driving experience and higher risk of causing an accident. This is typically the case even if you have no accidents on your driving record.
Is it cheaper to stay on my parents’ insurance policy?
Whether or not it is cheaper to stay on your parents’ car insurance policy depends on your situation. If you are still living at home, do not own any vehicles and only occasionally drive their vehicles, you may be able to stay on your parents’ policy as a permissive driver. To begin this process, you or your parents may speak with an agent to see how rates differ on your own policy versus a shared policy.
However, if you have moved to your own residence or own a car that is registered in your name only, you may be required to purchase a separate policy from your parents. By shopping around and requesting quotes, you’ll be able to customize your insurance coverage and see what insurance discounts are available to you. You may even qualify for a family loyalty discount if your parents’ insurance carrier offers one for staying with the same company.
Is my premium going to go down as I get older?
In general, car insurance premiums tend to decrease as you get older and obtain more experience behind the wheel, provided that you maintain a clean driving record. However, age is only one of many rating factors for car insurance, which includes both external and personal factors. This includes the cost of labor and repair, crash rates in your area, your driving record, where you move to, what kind of car you purchase and your commute, among other factors. As such, it is normal for car insurance premiums to fluctuate from year to year.
Will my credit score affect my insurance?
Insurance companies in most states use credit scores as part of determining a driver’s risk profile. As a young adult, it is likely you do not have a long credit history yet. Over time, a good credit score could help provide some benefits to your insurance premium. However, the use of credit scores as a rating factor in car insurance has been banned in California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania. If you reside in one of these states, your insurance premium will not be impacted by your credit score.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 21-year-old male and female drivers with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. For students, a good student discount or distant student discount is applied to corresponding rates.
Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.