As a driver, you may not realize how much your age can impact your car insurance premiums if you live in certain states. Nearly every state allows insurers to use age as a determining factor when determining your car insurance rates, and your age has typically one of the biggest impacts on the cost of your premium.
The reason insurance companies factor in your age is because age is generally an indicator of how experienced you are behind the wheel. As such, being a younger driver is typically associated with higher risk of accidents or incidents behind the wheel, which translates to higher premiums in many cases. Although 25-year-olds still typically pay higher premiums than older drivers, you can usually expect lower average premiums 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 full coverage car insurance premium for 25-year-olds is $2,176 per year, which is significantly more than the overall U.S. average annual full coverage premium of $1,771 per year. Minimum coverage costs an average of $654 per year for 25-year-olds, whereas the national average is $565 per year.
At 25 years old, you may have more experience 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 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 frequent or serious accidents. Because of this, the average male driver tends to have higher premiums than the average female driver.
| Average annual premium for full coverage | Average annual premium for minimum coverage | |
|---|---|---|
| 25-year-old Male | $2,247 | $660 |
| 25-year-old Female | $2,106 | $648 |
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 building their lives. If finding cheap car insurance 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 on 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 | Average annual premium for full coverage | Average annual premium for minimum coverage |
|---|---|---|
| Amica | $1,753 | $504 |
| Erie | $1,584 | $566 |
| State Farm | $1,637 | $523 |
| Travelers | $1,657 | $523 |
| USAA | $1,585 | $433 |
Amica
Amica’s full and minimum coverage premiums are the most expensive 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 coverage types you may be able to add features like full glass coverage, roadside assistance, rental car reimbursement and accident forgiveness. You may also have access to numerous discounts. Amica scored well above the industry average in J.D. Power’s 2021 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. The company offers discounts for paying in full, vehicle safety features and insuring 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 company serves only 12 states.
Learn more: Erie Insurance review
State Farm
With 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 coverage types or discounts as some other carriers on our list, there are still ways to personalize your coverage and save. You might choose to participate in State Farm’s Drive Safe & Save program, for example, which tracks your driving habits and rewards drivers with savings for safe practices behind the wheel.
Learn more: State Farm Insurance review
Travelers
While Travelers has the second-highest average full coverage premium on our list, the company offers plenty of deals such as multi-policy and student discounts that may help you bring down your insurance costs. The company offers numerous coverage options, 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
USAA
USAA only sells insurance policies to 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 J.D. Power customer satisfaction rankings due to its eligibility restrictions, it consistently receives high scores for both claims service and overall customer satisfaction. If you are a safe driver, insure a new car, garage your vehicle on a military base or you store your vehicle while you are deployed, you may qualify for a discount.
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, which means that companies may weigh your personal characteristics differently. For instance, one company may consider your occupation, whereas another company may not. Additionally, every driver has a different set of preferences and needs when it comes to car insurance. Determining what you want from a company, like certain coverage options or digital tools, may help you find the right company for you. Once you’ve nailed down the companies with the right policy options for you, it may be helpful to compare quotes from multiple providers to find the best rates.
Compare discounts
Most auto insurance companies offer discounts, but some companies may have more discounts that apply to you. 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 insurance coverage and one for comprehensive insurance coverage. 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
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
Some states do not allow insurance companies to use your credit score as a rating factor, but most states allow this practice. Drivers with lower credit scores are statistically more likely to file claims, so insurance companies charge a higher price to offset this risk. If you can increase your credit score, you may 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, the following steps may help you 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, coverage options and customer service.
- 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 who rates highly may help you feel comfortable with your insurance carrier.
If you are unsure where to start, guidance from a licensed insurance agent may be helpful. Insurance agents may be able to evaluate your situation and make recommendations for coverage options and policy features that fit your needs.
Frequently asked questions
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 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.
Age: Rates were calculated by evaluating our base profile with the age 25 (base: 40 years) applied. Driver may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts.
Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.
These are sample rates and should only be used for comparative purposes.
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