Car insurance premiums are calculated using a number of factors, and age is one of the biggest. How old you are is often an indication of how experienced you are behind the wheel of a car and what driving habits you may be more likely to engage in. For example, younger drivers are not as experienced as older drivers and thus may be more at risk for causing accidents.
At age 25, insurers no longer consider you a “youthful driver” and your insurance rates begin to go down. Although your age still means you pay more than the average driver, you can expect your premiums to start to decrease each year that you get older, as long as you do not have any accidents or tickets on your record.
How much is car insurance for a 25-year-old?
The average car insurance premium for 25-year-olds is$2,108 per year, which is significantly more than the overall U.S. average annual full coverage premium of $1,674 per year. Minimum coverage costs, on average, $616 per year for 25-year-olds, whereas the national average is $565 per year.
At 25-year-old, you may have more experience than teen drivers, and so you pay lower average rates than you may have when they were younger. But you still have significantly less experience than, say, a 40-year-old. While your rates should continue to decrease as you get older, you may still pay higher-than-average premiums for several years.
Average cost of males vs. females
Most states take gender into consideration when rating policies. Males tend to engage in riskier driving behavior than females, which can lead to more accidents and more serious accidents. Because of this, men tend to pay more than women for car insurance.
| Average annual premium for full coverage | Average annual premium for minimum coverage | |
|---|---|---|
| Male | $2,181 | $624 |
| Female | $2,036 | $609 |
Cheapest car insurance companies for 25-year-olds
Although you are paying less for insurance than you did when you were a teen or in your early 20s, budget may still be a primary concern for you in your mid-20s. Many drivers in this age group are starting new jobs, moving out and building their own lives. If budget is your primary concern, Bankrate’s research may be able to help you find coverage that fits your budget.
Our insurance editorial team obtained premium information from Quadrant Information Services. We then analyzed the data based on the largest car insurance companies by market share. If you are looking for the cheapest car insurance for 25-year-old drivers, you may want to get a quote from these companies:
| Insurance company | Average annual premium for full coverage | Average annual premium for minimum coverage |
|---|---|---|
| Amica | $1,801 | $612 |
| Erie | $1,459 | $437 |
| Travelers | $1,701 | $418 |
| State Farm | $1,510 | $422 |
| USAA | $1,694 | $558 |
Amica
Amica’s full and minimum coverage premiums are the highest on our list, but still lower than the national average for 25-year-olds. Amica offers auto insurance coverage options and discounts that may help you customize your coverage. In addition to the standard coverages, you may be able to add features like full glass coverage, roadside assistance, rental car reimbursement and accident forgiveness.
Amica also offers plenty of ways to help you save money. You may get a discount for bundling multiple policies, being accident free, having certain vehicle safety features or paying in full, among others. Amica received the second-highest ranking from J.D. Power in the 2020 U.S. Auto Claims Satisfaction Study, indicating that customers tend to be highly satisfied with its claims service.
Learn more: Amica Insurance review
Erie
If you are looking for cheap full coverage, Erie’s average full coverage rate is the lowest on our list. On top of the low average rate, Erie offers numerous discounts that could help you save even more. Discounts include paying in full, vehicle safety features and insuring more than one policy with Erie.
Erie offers numerous coverages on their standard auto policy, like locksmith coverage and pet injury coverage, that other companies do not offer at all, let alone standard. However, Erie’s Rate Lock option may be the most unique feature of the company. With this feature, your rate will stay the same, unless you make changes to your policy like adding a car or driver. Erie also received an above-industry-average ranking from J.D. Power for claims service.
Learn more: Erie Insurance review
Travelers
With the lowest minimum coverage premium on our list, Travelers offers affordable coverage for 25-year-olds. If you are looking for a company with plenty of coverage options and discounts to help you control your insurance coverage and cost, Travelers may be a good choice.
The company offers numerous optional coverages, including new car replacement, ridesharing coverage, loan/lease gap insurance and rental reimbursement coverage. You may save money by insuring multiple cars or policies with Travelers, having continuous insurance, insuring a hybrid or electric car, paying in full or owning a home, even if you do not insure it with Travelers.
Learn more: Travelers Insurance review
State Farm
With over 16% of the market share, State Farm is the largest auto insurance company in the country. If you prefer to handle your insurance in person, rather than by phone or online, State Farm could be a good choice. The company has a nationwide network of agents who can help you with your insurance needs.
Although State Farm does not offer as many optional coverages or discounts as some other carriers on our list, there are still ways to customize your coverage and to save. You may be able to add ridesharing coverage, emergency roadside service and car rental coverage to your policy. And you might save if you insure more than one car or policy with State Farm, you stay accident free or if your vehicle has certain safety features. You might also choose to participate in State Farm’s Drive Safe & Save program to track your driving habits and potentially qualify for a discount.
Learn more: State Farm Insurance review
USAA
USAA only services former and current military, as well as their immediate family members. If you qualify, you may want to get a quote from USAA. Although the company is not eligible for official ranking with J.D. Power due to its eligibility restrictions, it consistently received high scores for both claims service and overall customer satisfaction.
USAA claims that most drivers save over $700 when they switch. On top of that, you may save if you are a safe driver, you are insuring a new car, you garage your car on a military base or you store your vehicle while you are deployed.
Learn more: USAA Insurance review
How to save on car insurance for 25-year-olds
Car insurance may be more expensive than average when you are 25, but there are still ways to save. Following the steps listed below could help you find the coverage you need at a price that fits your budget.
Shop around
Every company has its own pricing algorithm. Therefore, one company may consider something such as your credit score important, another company may not put as much stock in it. Additionally, every driver has a different set of wants and needs when it comes to car insurance. Determining what you want from a company, like certain coverage or digital tools, and then getting quotes from several different carriers might help you find a policy that is right for you.
Compare discounts
Most insurance companies offer discounts, but some companies may have more discounts that you can qualify for than others. If you can take advantage of several discounts, you may see significant savings. You can often research discounts on a company’s website, but you can also talk to a representative or visit a local agency to discuss discount options and discover if you qualify.
Increase your deductibles
Full coverage auto insurance policies have two deductibles, one for collision and one for comprehensive. Your deductible is the amount of money you will pay if you file a claim for damage to your vehicle. Because collision claims tend to be more expensive, your collision deductible usually has more of an impact on your premium than your comprehensive deductible. Increasing one or both of your deductibles usually means you will pay a lower premium, but you will have more to pay out of pocket if you claim damage to your vehicle.
Reconsider the car you drive
Just like insurance companies rate each driver based on their individual rating factors, cars are also rated differently. Some cars may be cheaper to insure than others due to the price of parts, the price of labor, standard safety features and the statistical likelihood of claims. Before trading or selling your car, though, be sure to get a quote for the car you plan to purchase.
Improve your credit score
Although some states do not allow insurance companies to use credit score as a rating factor, most states allow this practice. Drivers with lower credit scores tend to file more claims, so insurance companies charge a higher price to offset this risk. If you can increase your credit score, you might see a reduction in your premium.
How to get the best insurance for a 25-year-old
The cheapest insurance does not always equate to the best insurance. If you are in the market for a new car insurance policy, there are a few steps you should take to determine the right coverage and company for you:
- Determine what you need: Are you looking for a company with a local agency, or do you prefer handling your policy online? Do you need or want full coverage? Are you looking for specific options like ridesharing coverage? Determining what you need might help you narrow down what companies can fit your situation.
- Compare companies and quotes: Getting quotes from several companies lets you compare prices, discounts, coverages and customer service.
- Review third-party rankings: Companies like J.D. Power review the customer and claims satisfaction ratings of various companies. AM Best reviews financial strength, which may be an indicator of a company’s ability to pay out claims. Reviewing these ratings and choosing a company who rates highly may help you feel comfortable with your insurance carrier.
If you are unsure where to start, guidance from a licensed agent may be helpful. Agents may be able to evaluate your situation and make recommendations for coverages and policy features that fit your needs.
Frequently asked questions
What is the best car insurance company?
The best car insurance company for you may be different than the best company for someone else. Although some companies stand out for available coverages, discounts offered, low average rates and high third-party rankings, everyone has different needs. Getting quotes from several companies might help you choose the best option for you.
How do I know how much car insurance I need?
Car insurance is not a one-size-fits-all purchase. You can purchase higher or lower limits, optional coverages and enhanced policy features. To determine how much coverage you need, first think about your situation. You will need to purchase at least your state’s minimum required coverages, and if you have a loan or lease, your lender will likely require you to have full coverage. When choosing a liability limit, be sure to buy enough to protect your finances and assets if you cause an accident. When choosing deductible levels for your full coverage, make sure you can reasonably pay your deductible if you file a claim for damage to your own car. If you are unsure how much coverage you need, talking to an agent may be helpful.
At what age does car insurance go down?
All car insurance companies work differently, but, on average, drivers are no longer considered “youthful” once they reach 25-years-old. After this age, you can expect to see your premiums begin to decrease. However, age is not the only factor that goes into car insurance premiums. The car you drive, the coverages you choose, the state and ZIP code you live in, your gender and your driving history, among other factors, also go into determining how much you pay.
Methodology
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 25-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 coverages that meet 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.
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