The thought of buying car insurance for your teenage driver might be enough to turn a few hairs gray. But insuring a teen or young adult driver doesn’t have to break the bank. Finding the cheapest auto insurance for your young driver is as easy as shopping around and looking for discounts that can reduce premium rates.
But price is not the only consideration when shopping for a newly licensed teen or young adult heading off to college. You should also look for providers that offer optional coverages and programs that can protect young drivers, like roadside assistance and usage-based insurance that enables you to monitor their driving habits.
Best car insurance for teens
Finding the best auto insurance for a teenager starts with looking at the best providers. Here are some of the top options.
Among the insurers we’ve researched, Geico provides the best rates for teen drivers. We requested a quote for a standalone policy for a teenager living in San Francisco, California and were pleased with the rate we received.
For an 18-year-old male driver who is student driving a 2018 Toyato Camry getting $15,000/$30,000 in bodily injury coverage, $5,000 in property damage liability coverage, $15,000/30,000 in underinsured and uninsured motorist coverage and $3,5000 in uninsured motorist property damage, we received a quote for a six-month premium of $667.
Other carriers can’t beat the discounts State Farm offers teen drivers. New drivers under 21 years of age can earn a discount when they complete an approved driver training course and reduce their rates even further when they maintain a clean driving record for three years.
Unlike other providers, State Farm enables teens to keep their discounts throughout their college years. A high school student that earns good grades can enjoy up to a 25 percent discount through the age of 25 if they continue to receive good marks. If your teens leave their cars at home when they go off to college, they may qualify for a student-away-from-home discount.
Progressive’s Snapshot program offers peace of mind for parents and potential savings for their teen drivers. The usage-based insurance rating program uses telematics to monitor a driver’s driving habits. Snapshot enrollees install a mobile app, which monitors driving habits such as acceleration, braking, mileage and phone usage. After a trip, parents can review their kids’ driving performance and teens can receive driving tips to improve their driving skills.
Progressive claims Snapshot users receive an average signup discount of $26 and users who maintain good driving patterns receive discounts of around $145 per year, on average. Progressive doesn’t offer Snapshot in all states.
Best car insurance for young drivers
The best car insurance for young adults might be different from the best option for teens. Here are the top car insurance providers for slightly older drivers.
For young adults, Geico comes through again with the lowest auto insurance rates. We requested a Geico car insurance quote for a young adult living in San Francisco, California, and received a great rate.
Using the same profile as before except now our driver is 25-year-old and an assistant manager, we received a six-month premium of $254.
Recent college grads can also earn discounts for alumni association membership and fraternity or sorority affiliation. Young adults who are members of the U.S. Armed Forces can earn up to a 15 percent discount, along with additional savings when deployed.
Young adults can save money on car insurance when they enroll in Nationwide’s SmartRide program. The usage-based insurance rating program uses a plugin device to track acceleration, braking, idle time, mileage and nighttime driving. Because most college students who live on campus spend less time behind the wheel, limited driving and good driving habits can lead to great savings.
Nationwide policyholders earn a 10 percent discount for signing up for the program, plus up to a 40 percent discount for maintaining safe driving patterns. College students can also earn a discount if they maintain at least a “B” average, plus even greater savings for membership in an alumni association, professional group or sports association.
Young people need all the help they can get navigating the challenges of university life or leaving the nest to start their own families. State Farm makes life a little easier for young adults with an exceptional roadside assistance program. The policy add-on covers battery jump starts, fuel delivery, locksmith service, towing and up to one hour of roadside mechanic’s labor.
Young adults can also earn up to a 17 percent discount when they purchase car and renters insurance and up to a 20 percent discount if they insure more than one vehicle.
Average cost of car insurance for teens and young drivers
Age and gender are major factors insurers use to determine teen auto insurance rates. On average, a 16-year-old pays around $2,661 for an annual premium. By the time they reach 19 years of age, males pay an average of around $1,346.
Young adults 24 years of age pay an average of around $724, while 39 year old drivers pay an average of $599.
Always take nationwide averages with a grain of salt because insurance companies consider many factors when setting car insurance rates.
How are rates determined for young drivers?
Insurers determine premium rates for teens the same way they do adults. Rating factors include:
- Age: Typically, drivers 29 years of age and younger pay more for car insurance, because statistically, they cause more accidents than drivers 30 years of age and older.
- Automobile make and model: Late model vehicles and cars with high sticker prices cost more to insure than more modest vehicles. Insurers also charge higher rates for fast sports cars and electric vehicles.
- Credit: Most states allow insurance carriers to use your credit score when calculating your policy rate. People with poor credit typically pay much higher rates than consumers with good credit scores.
- Gender: Males usually pay higher rates than females pay for car insurance, even if they have clean driving records.
- Location: Car owners who live in areas prone to car theft and vandalism pay more for auto insurance.
- Mileage: The more you drive, the more likely you’ll have an accident. People who only use their cars occasionally usually pay lower rates than people who drive several miles every day.
- Types and amount of coverages: Drivers who only purchase required coverages such as bodily injury and property liability insurance pay much less for car insurance than motorists who also buy collision and comprehensive insurance. If you own your vehicle outright, you can buy state required coverages, but if you finance a vehicle, the lender will require you to buy collision and comprehensive insurance too.
Because these variables will change your rate from provider to provider, always get several quotes before settling on an insurance company.
Discounts for teens and young drivers
Almost every car 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 policy discounts
Some carriers give you a break on premiums when you add multiple vehicles to a single policy. Insurance companies that offer a multi-car discount include:
Good student discount
Because many teens and young adult drivers are students, many insurance companies provide discounts for maintaining good grades. Usually, you’ll need to earn a 3.0 GPA or higher to get the discount. Providers include:
Young driver safety training
To get this discount, you usually must take an approved driver training course. Most courses go over the rules of the road and teach you to drive defensively. Providers that extend safety training course discounts include:
- State Farm
Usage-based rating discounts
Usage-based rating is a relatively new way to reduce your car insurance rate. Providers that offer the 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. Drivers who maintain good driving habits can earn discounts. Usage-based insurance rate programs include:
Frequently asked questions
Can I save money if I add my teenager to my auto insurance policy, or should I purchase a standalone policy?
When purchasing car insurance for a 16 or 17-year-old, it usually costs much less to add them to your existing policy. However, by the time your teen reaches 19 or 20 years old, a standalone policy may offer a better premium rate.
What types of discounts do insurers offer young drivers?
Insurance companies offer many discounts for teen drivers and young adults. The most common ways to reduce your car insurance rates include good student and driver education discounts. Also, consider choosing an insurer that offers a usage-based discount program, which rewards good driving habits with lower rates.
Should I buy my teenager a new or used car?
Typically, it costs more money to insure a new car, compared with a used vehicle. If possible, purchase an older vehicle with good resale value and high safety ratings. If you can afford to pay cash, you can avoid purchasing expensive collision and comprehensive coverages.
If my child goes away to college and leaves their car at home, can they get a discount on insurance?
Yes, depending on which company insures the vehicle. Many insurers offer substantial “student away at school” discounts. Many of these discount programs even provide coverage for the student when they return home for weekends and holidays.