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Car insurance for 25-year-olds
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In almost every state, car insurance companies can use your age to help determine how much to charge for coverage. Generally, the younger you are, the higher your premium. The good news? Once you turn 25, your insurance company may no longer consider you a youthful driver and your car insurance premium could decrease. Bankrate’s team of experts conducted an exhaustive study of average premiums to help our readers find the best car insurance for 25-year-olds.
- The average full coverage car insurance premium for 25-year-olds is $2,473 per year, which is higher than the overall average annual premium of $2,014.
- Rates tend to begin decreasing as an individual gets older and gains driving experience, and the first significant drop usually occurs at age 25.
- However, the decrease may not be immediate — and might not occur at all — depending on several factors.
- Other ways to potentially save on car insurance include shopping around, comparing discounts and more.
How much is car insurance for a 25-year-old?
The average full coverage car insurance premium for 25-year-olds is $2,473 per year, which is significantly more than the overall average annual full coverage premium of $2,014 per year. Minimum coverage costs an average of $747 per year for 25-year-olds, while the national average is $622 per year.
At 25 years old, you most likely have more experience behind the wheel than teen drivers and as a result, pay lower average rates than when you were younger. However, you likely still have significantly less experience than a 40-year-old driver. While your rates should continue to decrease as you age until your 70s, you may still pay higher-than-average premiums for several years. Your driving record is another key factor in determining your auto insurance rates. Speeding tickets, at-fault accidents and other moving violations may negate age-related premium reductions.
Does car insurance go down at 25?
Although 25-year-olds tend to pay higher premiums than 40- and 50-year-old drivers, you can usually expect lower average premiums than teens and younger adults. Generally, you’ll see a drop in premium at the first renewal after you turn 25. Your policy renewal is the end of your policy term and the start of a new term. This means that, unless your renewal date falls on your birthday, you may have to wait a bit to see the savings. Keep in mind, too, that numerous factors impact premiums, so your own premium might not change much or could even increase, depending on your unique situation.
How much do rates decrease for 25-year-olds in each state?
In addition to your age, where you live may have a significant impact on how much you pay for car insurance. In Hawaii and Massachusetts, auto insurance companies are not allowed to consider your age as a rating factor, but carriers in Massachusetts are allowed to consider how many years you have been a licensed driver. Washington, D.C. and New Mexico have some of the highest average full coverage rates for 25-year-old drivers, while Louisiana and Georgia have some of the lowest.
The national average full coverage premium for 24-year-old drivers on their own policy is $2,837 annually, with a minimum coverage policy averaging $850. Considering the national average rates for a 25-year-old driver — $2,473 for full coverage and $747 for minimum — the average premium difference you might see between birthdays is $364 or $103 per year, depending on which type of insurance you have. Note that you will likely not see your rate adjust until your policy renews.
However, how much your rate decreases between 24 and 25 (if it does at all) depends on a number of factors, including the state you live in. Drivers in Montana and Vermont might see the most significant savings at 25 percent and 23 percent, respectively. North
Carolina and California residents typically experience the smallest reduction at 2 percent and 7 percent, respectively. Note that these figures do not include states that prohibit insurers from using age as a rating factor (Hawaii and Massachusetts).
The rates below are for 24-year-old drivers and 25-year-old drivers on their own policy.
Average cost of car insurance for males vs. females at age 25
Most states take gender into consideration when rating policies. Males tend to engage in riskier driving behavior than females, which may lead to more frequent or serious accidents. Because of this, the average male driver tends to have higher premiums than the average female driver — particularly in their teens and 20s. This difference may not be relevant in states that do not allow gender as an insurance rating factor. These include California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania.
|Average annual premium for full coverage||Average annual premium for minimum coverage|
Cheapest car insurance companies for 25-year-olds
Although you will likely pay 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 of their parents’ homes and may be purchasing their own car insurance policy for the first time. If securing cheap car insurance is your goal, Bankrate’s research may be able to help you find coverage that fits your budget.
Our insurance editorial team obtained premium information from some of the largest car insurance companies by market share from Quadrant Information Services. The rates below represent the average full and minimum coverage rates of a 25-year-old driver who rents their home. 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||Bankrate Score||Average annual premium for full coverage||Average annual premium for minimum coverage|
Geico offers the lowest average full coverage premiums on our list for 25-year-olds. In fact, cheap premiums, nationwide availability and a highly-rated mobile app helped Geico tie with Amica for best auto insurance company overall in the 2023 Bankrate Awards. Young adults just entering the workforce may be especially interested in Geico’s affiliation discount, which could help you save simply by being a member of an affiliated professional group, fraternity or sorority. Although Geico’s endorsement selection may be lacking when compared to other carriers, it could still be a good choice for 25-year-old drivers looking for low-cost, basic coverage.
Learn more: Geico Insurance review
If you are looking for cheap full coverage and excellent customer service, Erie could be a good place to start. On top of the low average rate, Erie offers numerous discounts that may help you save even more. The company offers discounts for paying in full, vehicle safety features and carrying more than one policy with Erie, among other deals. 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. However, before choosing Erie, keep in mind that the regional company serves only 12 states and Washington, D.C.
Learn more: Erie Insurance review
Knowing exactly what coverage options you are paying for and how your policy works may be challenging for people of all ages, especially young adults. Nationwide’s On Your Side Review may help. Nationwide extends this benefit to all of its policyholders at no additional cost. Here, you meet with your agent for a detailed policy review to ensure that you understand your coverage needs and take advantage of eligible discounts. In addition to Nationwide’s low rates, this perk could help 25-year-old drivers feel confident that they’re getting a quality policy at a competitive price. Nationwide also has robust endorsement options, including accident forgiveness and a vanishing deductible, but coverage is only available in 46 states.
Learn more: Nationwide Insurance review
If you're a 25-year-old driver looking for robust coverage options, you might want to check out Amica. In addition to the standard coverage types, you may be able to add features like full glass coverage, roadside assistance, rental car reimbursement and accident forgiveness. For drivers not looking for a full coverage policy, Amica has the second-lowest average minimum coverage rates on our list. Additionally, Amica took first place in J.D. Power’s 2022 U.S. Auto Claims Satisfaction Study, indicating that customers tend to be highly satisfied with its claims service. Note that Amica is not available in Hawaii. For more information, you may want to request an insurance quote from Amica.
Learn more: Amica Insurance review
With nearly 17 percent 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, as the company has a nationwide network of 19,000 exclusive agents for personalized policy management. Although State Farm does not offer as many optional coverage types as some other carriers on our list, it may be a good option for drivers with a speeding ticket or at-fault accident on their record. The carrier won our 2023 Bankrate Award for best auto insurance company for high-risk drivers and offers numerous discounts. However, new coverage is not available in Massachusetts and Rhode Island.
Learn more: State Farm 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 potentially save. Following the steps listed below might help you find the coverage you need at a price that fits your budget.
Insurance companies may weigh your personal rating factors differently, so it pays to shop around. For instance, one company might consider your occupation, whereas another company may not. Additionally, every driver has different preferences and needs when it comes to car insurance. Determining what you want, like certain coverage options or digital tools, could help you find the right company for you. Once you’ve nailed down the most appealing options, experts recommend comparing rates from at least three insurers for the same coverage to identify the best deal.
Most auto insurance companies offer discounts, but some companies may have more discounts that apply to you. If you can take advantage of several, you may see significant savings. You can often research discounts on a company’s website, but you can also talk to a customer service representative or visit a local agency to discuss discount options and figure out if you qualify.
Some of the common discounts available for 25-years-olds include:
- Defensive driving: By taking a defensive driving or safe driving course, you might earn a discount from your insurance provider.
- Safety features: If your vehicle has certain safety features (or you add them), such as anti-lock brakes or an anti-theft device, it could help you save.
- Bundling: Many car insurance companies offer discounts for purchasing multiple policies from them, such as auto and home.
- Paperless: Some auto insurance companies provide discounts for paying your bill online or agreeing to receive electronic communications.
Increase your deductibles
Full coverage auto insurance policies have two deductibles, one for collision insurance coverage and one for comprehensive insurance coverage. 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. Most insurance professionals advise choosing a deductible amount you can comfortably pay with no notice. Otherwise, you could put yourself in a financial bind if you cause an accident or need to make a comprehensive claim.
Reconsider the car you drive
Similar to how 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 and standard safety features. Before trading or selling your car, you may want to get an insurance quote for the car you plan to purchase.
Improve your credit score
Unless you live in California, Hawaii, Massachusetts or Michigan (where state law prohibits or limits the use of credit as a rating factor), your credit history can impact your car insurance premium. Drivers with worse credit are statistically more likely to file claims, so insurance companies charge a higher price to offset this risk. If you can improve your credit, you may see a reduction in your premium.
How to choose the best car insurance at age 25
The cheapest auto insurance may not be the best option for your needs. If you are in the market for a new car insurance policy, the following steps may help you determine the right coverage and company for you:
- Consider state minimum insurance requirements: In almost every state, you are required to carry a minimum level of car insurance to legally drive on public roads. However, opting for minimum coverage may leave you financially vulnerable if you’re at fault in an accident. For instance, if you hurt someone as an at-fault driver and your minimum bodily injury limits are exceeded, you may be liable to cover the rest of the injured party’s medical bills out of pocket. It can be tricky to strike a balance between affordability and protection, so you might find it helpful to consult with a licensed agent to discuss your options.
- Consider your personal insurance needs: In addition to state minimum requirements, you will likely have to carry comprehensive and collision coverage if you finance or lease your vehicle. Financing and leasing requirements aside, you might also want to carry emergency roadside assistance in case of a breakdown or gap insurance if you paid a smaller-than-average down payment on your new car.
- Compare companies and quotes: Getting quotes from several companies lets you compare prices, discounts, coverage options and customer service ratings. Most companies offer online quotes, but some may require you to get a quote in person or over the phone.
- Review third-party rankings: Companies like J.D. Power review overall customer satisfaction and claims satisfaction ratings of various insurance providers. AM Best reviews financial strength, which indicates a company’s historical ability to pay out claims. Reviewing these ratings and choosing a company that rates highly may help you feel comfortable with your insurance carrier.
If you are unsure where to start, guidance from a licensed insurance agent might be helpful. Insurance agents may be able to evaluate your situation and make recommendations for coverage options and policy features that fit your needs.