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Best car insurance for young adults

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It’s no secret that young drivers pay a high price for car insurance. Still, some companies offer relatively low rates, competitive young-driver discounts and top-notch service. After careful analysis, Bankrate’s insurance editorial team found that Geico, Nationwide and State Farm offer the best affordable car insurance for young adults in the U.S.

We broke down why these three companies are best for young adults, the average premiums you can expect to pay and what discounts might apply.

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Key takeaways
  • Young drivers have less experience behind the wheel, which could lead to more accidents. This is why rates tend to be higher for younger drivers.
  • Young adults may want to get quotes from Geico, Nationwide and State Farm due to low average premiums and robust coverage options.
  • Searching for carriers that offer qualifying discounts may help lower young adult rates, which tend to be high.
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Best car insurance for young adult drivers

Bankrate’s research revealed that Geico, Nationwide and State Farm are among the best car insurance companies for young adults. We started our analysis by analyzing average premium data from Quadrant Information Services. We also took coverage options, young driver-specific discounts, policy features and third-party ratings into consideration, to help you find a carrier that offers affordable rates and adequate coverage.

Keep in mind that your rate may depend on factors such as if you are on a parent’s plan, are married or own a home or rent. To determine the average cost of car insurance for young adults across the U.S., Bankrate compiled rates based on single young adults who rent their residence and have their own insurance plan.

Geico

Geico offers competitive car insurance rates for young drivers with a few years of experience. The company also offers a long list of discounts, including student discounts, that could help you lower your premium.

Perks Drawbacks
Wide variety of discounts for alumni membership, fraternity or sorority affiliation and military members Few local in-person agencies make it difficult for those who want a single point of contact for insurance
Primarily digital experience could be advantageous for those who want to manage their own policy Received a private passenger complaint index rating of 1.39 from the National Association of Insurance Commissioners (NAIC), indicating that Geico received slightly more complaints than normal
Age Average annual premium for minimum coverage Average annual premium for full coverage
Age 20 $715 $2,724
Age 21 $573 $2,234
Age 22 $535 $2,083
Age 23 $492 $1,926
Age 24 $467 $1,826
Age 25 $428 $1,676

Recent college grads might also earn discounts for alumni association membership and fraternity or sorority affiliation. Young adults who are active-duty members of the U.S. Armed Forces could earn up to a 15% discount, along with additional savings when deployed.

Learn more: Geico Insurance review

Nationwide

If you are looking for an auto insurer with plenty of options for personalization, Nationwide might be a good fit. The company offers numerous coverage add-ons, like roadside assistance and gap insurance, to help create personalized car insurance for teens and young drivers.

Perks Drawbacks
Offers many optional add-on coverage selections to personalize car insurance Ranked below industry average in J.D. Power’s 2021 U.S. Auto Claims Satisfaction Study
Usage-based telematics program that tracks driving habits could be an opportunity to save more for low-mileage and safe drivers Auto insurance is not offered in Alaska, Hawaii, Louisiana or Massachusetts
Age Average annual premium for minimum coverage Average annual premium for full coverage
Age 20 $1,201 $3,265
Age 21 $892 $2,383
Age 22 $807 $2,202
Age 23 $740 $2,060
Age 24 $689 $1,932
Age 25 $605 $1,669

Young adults may be able to save money on auto insurance when they enroll in Nationwide’s SmartRide program. The usage-based insurance rating program uses an app to track acceleration, braking, idle time, mileage and nighttime driving. Because many college students who live on campus spend less time behind the wheel, limited driving and good driving habits may lead to savings. Drivers get a 10% discount on certain coverage types just for signing up for this telematics program and could earn up to a 40% discount on certain coverage types depending on their driving habits.

Learn more: Nationwide Insurance review

State Farm

If you like working with a local agent, State Farm might be a good choice for auto insurance for young adults. The company has a network of 19,000 agents throughout the U.S. who can help you with your auto insurance needs.

Perks Drawbacks
Large network of in-person agencies throughout the country means you can stay with State Farm wherever you move Auto insurance discounts are more standard compared to other car insurance companies
Scored above average in recent J.D. Power U.S. Auto Claims Satisfaction Studies from the past three years Over time, average rates for adult drivers may be higher compared to those of other companies
Age Average annual premium for minimum coverage Average annual premium for full coverage
Age 20 $1,014 $2,908
Age 21 $861 $2,503
Age 22 $779 $2,298
Age 23 $694 $2,085
Age 24 $629 $1,932
Age 25 $558 $1,695

Young people often need help navigating the challenges of university life or leaving the nest to live on their own or start a family. State Farm makes life a little easier for young adults with an exceptional roadside assistance program. This covers battery jump starts, fuel delivery, locksmith service, towing and up to one hour of roadside mechanic’s labor.

Learn more: State Farm Insurance review

Average cost of car insurance for young drivers

The national average cost of full coverage car insurance is $1,674 per year. However, young drivers will likely pay significantly more for their auto insurance. Age and gender are some of the biggest rating factors that impact your premium. In all states except Hawaii and Massachusetts, age is used as a rating factor, with younger drivers usually paying higher rates. Additionally, all states except California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania also use gender as a rating factor. Male drivers tend to pay higher premiums than females, although at some ages and in some states, that tendency is flipped.

On average, a 20-year-old male pays around $4,098 per year for a full coverage annual premium. By the time they reach 25 years of age, males pay an average of around $2,183 per year for the same coverage. Comparatively, female drivers pay less on average than males, even as young drivers in the same age periods.

Although young drivers face higher car insurance rates compared to other age groups, there are ways to find affordable car insurance. Many insurance companies offer discounts specifically for young drivers, such as the good student discount. Below is a list of the average cost of full coverage car insurance for young drivers, but because of individual rating factors and the number of discounts applied, actual rates will vary.

Average annual full coverage premium for young male and female drivers

Age Male Female % difference
Age 20 $4,098 $3,492 16%
Age 21 $3,166 $2,769 14%
Age 22 $2,913 $2,578 12%
Age 23 $2,733 $2,446 11%
Age 24 $2,590 $2,332 10%
Age 25 $2,183 $2,038 7%

Average car insurance costs for young drivers by state

Location is another critical factor in determining auto insurance premiums. Every state has different insurance laws, which can impact the rates set by every auto insurance company. Additionally, the risk of getting into an accident may vary by location.

The table below illustrates the average annual full coverage premium for young adults, analyzed by state.

Average annual full coverage premium by age and state

State 20-year-old 21-year-old 22-year-old 23-year-old 24-year-old 25-year-old
Alabama $4,247 $3,103 $2,899 $2,742 $2,583 $2,189
Alaska $3,534 $2,810 $2,627 $2,457 $2,350 $2,050
Arizona $3,391 $2,750 $2,570 $2,399 $2,284 $1,953
Arkansas $4,357 $3,370 $3,092 $2,947 $2,824 $2,470
California $3,980 $3,459 $3,228 $3,064 $2,870 $2,671
Colorado $4,494 $3,411 $3,161 $3,016 $2,891 $2,443
Connecticut $4,420 $3,079 $2,769 $2,546 $2,406 $2,075
Delaware $4,352 $3,045 $2,831 $2,687 $2,568 $2,176
Florida $5,726 $4,580 $4,148 $3,955 $3,828 $3,357
Georgia $4,763 $3,589 $3,426 $3,209 $3,071 $2,562
Hawaii* $1,294 $1,272 $1,273 $1,272 $1,272 $1,272
Idaho $2,648 $2,034 $1,882 $1,795 $1,729 $1,460
Illinois $3,634 $2,807 $2,556 $2,387 $2,267 $1,913
Indiana $2,945 $2,421 $2,207 $2,129 $1,979 $1,682
Iowa $2,657 $2,150 $1,996 $1,907 $1,823 $1,550
Kansas $3,838 $2,998 $2,758 $2,675 $2,597 $2,150
Kentucky $5,444 $4,071 $3,788 $3,649 $3,479 $2,863
Louisiana $5,911 $4,847 $4,390 $4,176 $3,979 $3,426
Maine $2,372 $1,566 $1,476 $1,420 $1,366 $1,107
Maryland $4,473 $3,208 $2,966 $2,732 $2,538 $2,208
Massachusetts* $1,451 $1,451 $1,451 $1,451 $1,451 $1,451
Michigan $5,743 $4,495 $4,165 $3,825 $3,625 $3,038
Minnesota $3,333 $2,856 $2,643 $2,444 $2,329 $2,011
Mississippi $3,840 $2,959 $2,763 $2,614 $2,494 $2,144
Missouri $3,923 $2,984 $2,788 $2,670 $2,562 $2,111
Montana $4,238 $3,183 $3,001 $2,760 $2,639 $2,094
Nebraska $3,414 $2,584 $2,368 $2,262 $2,187 $1,839
Nevada $4,928 $3,903 $3,656 $3,358 $3,250 $2,836
New Hampshire $2,806 $2,199 $2,000 $1,906 $1,806 $1,512
New Jersey $4,232 $3,346 $3,045 $2,818 $2,670 $2,294
New Mexico $3,033 $2,511 $2,348 $2,243 $2,148 $1,862
New York $4,861 $3,754 $3,542 $3,354 $3,207 $2,798
North Carolina $1,653 $1,576 $1,559 $1,542 $1,512 $1,482
North Dakota $2,648 $2,158 $1,995 $1,852 $1,777 $1,576
Ohio $2,679 $2,097 $1,967 $1,832 $1,722 $1,462
Oklahoma $3,791 $3,154 $2,903 $2,739 $2,615 $2,299
Oregon $2,945 $2,395 $2,173 $2,062 $1,972 $1,721
Pennsylvania $3,806 $2,913 $2,735 $2,586 $2,437 $1,964
Rhode Island $4,238 $3,314 $3,060 $2,824 $2,707 $2,324
South Carolina $3,733 $2,661 $2,506 $2,347 $2,250 $1,921
South Dakota $3,232 $2,645 $2,522 $2,379 $2,300 $2,029
Tennessee $3,241 $2,561 $2,358 $2,201 $2,033 $1,789
Texas $4,455 $3,346 $3,126 $2,960 $2,817 $2,353
Utah $3,215 $2,416 $2,221 $2,080 $1,958 $1,651
Vermont $3,539 $2,133 $2,021 $1,911 $1,853 $1,413
Virginia $3,246 $2,409 $2,226 $2,098 $1,996 $1,770
Washington $3,034 $2,235 $2,023 $1,887 $1,794 $1,545
Washington, D.C. $3,863 $3,224 $2,989 $2,766 $2,602 $2,246
West Virginia $3,520 $2,773 $2,530 $2,370 $2,216 $1,912
Wisconsin $2,609 $2,096 $1,922 $1,813 $1,726 $1,505
Wyoming $3,035 $2,616 $2,397 $2,232 $2,142 $1,720

*Hawaii and Massachusetts prohibit using age as a rating factor

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How are rates determined for young drivers?

Auto insurance rates for young adults are determined in the same way as they are for older drives. There are several rating factors that determine car insurance premiums, including:

  • Age: Typically, drivers who are 25 and younger pay more for car insurance, because their lack of driving experience may put them at a greater risk for causing accidents than older drivers. Hawaii and Massachusetts state regulations do not permit insurance companies to use age as a rating factor.
  • Vehicle make and model: Some cars are cheaper to insure than others. Before buying a vehicle, it may be a good idea to get a quote from your insurance carrier to make sure you can afford the coverage.
  • Credit: Most states allow insurance carriers to use your credit-based insurance score when calculating your policy rate. People with poor credit typically pay much higher rates than consumers with good credit scores. Regulations in California, Hawaii, Massachusetts and Michigan do not permit the use of credit as a factor in determining auto insurance rates. Washington is in the process of determining if credit should be used as a rating factor going forward.
  • Gender: Males usually pay higher rates than females pay for car insurance, even if they have clean driving records. Men are statistically more likely to get into accidents than women, and those accidents tend to be more severe, according to research by the Insurance Information Institute (Triple-I). California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania ban the use of gender as a rating factor.
  • Location: If you live in an area that has a high likelihood of accidents or damage caused by natural disasters, theft or vandalism, you may pay more for coverage. Additionally, every state has different insurance laws, which can affect premiums.
  • Mileage: The more you drive, the more likely it is that you will have an accident due to being on the road more often. People who only use their cars occasionally may pay lower rates than people who are on the road more often.
  • Types and amount of coverage types: Drivers who only purchase minimum required coverage types, such as bodily injury and property damage liability, generally pay less for auto insurance than motorists who also buy collision and comprehensive coverage. Lenders will typically require you to buy collision and comprehensive insurance as well, and most insurance experts recommend purchasing more than the minimum amount required to better protect your finances. Your deductible for certain coverage types will also play a role in how much you pay.

Because these variables will change your rate from carrier to carrier, it can be helpful to get several quotes before settling on an auto insurer.

Discounts for young drivers

Almost every auto insurance company offers discounts to drivers, and some even offer discounts specifically for young drivers. Finding a company that offers the right discounts for your driving habits may be the best way to get cheap car insurance.

  • Multi-car discounts: Most auto insurers give a slight discount when you add multiple cars to a single policy. It does not fully offset the cost of insurance for each vehicle, but overall, the vehicles are cheaper to insure together.
  • Multiple policy discount: For drivers who rent an apartment and own a car, bundling their auto and renters insurance can be one way to make both policies more affordable.
  • Good student discount: Most companies offer discounts for students who maintain a certain GPA or letter grade average. These student discounts are intended for full-time high school and college students, and may save hundreds of dollars per year on insurance premiums.
  • Young driver safety training: Many companies offer discounts to students who have taken a driver education class or an approved driver training course. Most courses go over the rules of the road and teach young drivers to drive defensively.
  • Usage-based rating discounts: Usage-based rating is a relatively new way to reduce your auto insurance rate, but could be a way to earn additional discounts. Carriers that offer these telematics programs require policyholders to use a mobile app or plugin device which monitors driving habits such as acceleration, braking, speed and trip distance each time they drive.
  • Distant student discount: Many auto insurers offer discounts for students who attend school away from home if they do not take a vehicle with them during the school term. You must be listed on your parents’ policy to take advantage of this discount.

Frequently asked questions

Can I save money if I add a young driver to my auto insurance policy?

It is typically less expensive to add a young driver to your existing auto insurance policy rather than purchasing a standalone policy for them. In addition, your teen will be unable to hold their own auto insurance policy until they turn 18. If you have a young driver to add to your policy, you may want to search for companies with student or young-driver discounts, like good student, student at school, driver training or teen driver savings.

Should I buy my teenager a new or used car?

Several factors go into the price of insurance for various car models, including the value of the vehicle, the statistical likelihood that it will be in an accident and the cost of repairs. Generally, an older vehicle is going to be cheaper to insure with a teen driver than a newer vehicle, usually because parts are more readily available and cheaper.

With an older vehicle, you may also feel comfortable buying liability-only coverage rather than full coverage, meaning that the insurer will not cover damage to the vehicle. That can help keep your auto insurance cost lower, although you should be aware that you’ll have to pay for damage to your vehicle out of pocket.

How much will my car insurance increase when I add a teenager to my policy?

On average, you will spend an average of $1,200 to $1,900 more per year after adding a teenager to your existing auto insurance policy.

Which is the best auto insurance discount for a teenager?

The best discount for your teen is whichever one applies to them. For instance, if your teen is a safe driver, they may benefit from enrolling in a telematics program that tracks their driving in real time. If they are away at college, they may want to benefit from a distant student deal.

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 18-year-old through 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. The drivers are renters on their own insurance plans except for distant student discount rates, in which case the drivers are on their parents’ plan.

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. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Written by
Lizzie Nealon
Insurance Writer
Lizzie Nealon is a former insurance writer for Bankrate. Her favorite part of the job is making home, auto and life insurance digestible for readers so they can prepare for the future.
Edited by
Insurance Editor
Reviewed by
Senior wealth manager, LourdMurray