Best car insurance for young drivers

Best car insurance for young drivers

With auto insurance rates on the rise in 2024, Bankrate's insurance editorial team focused on finding companies that offer competitively low premiums compared to the national average, which ranges from $3,535 per year for full coverage for 20-year-old drivers to $2,854 for 25-year-olds. We started by analyzing the latest average premium data available from Quadrant Information Services but also took into account coverage options, available discounts and expert third-party ratings for each carrier.

While the carriers below stand out as the best car insurance companies for the average young adult, keep in mind that your own insurance situation is unique. If you're on a parent's policy, are married or own your home, your rates could look different from the ones displayed here. It's always a good idea to go beyond average data and compare personalized quotes when choosing an insurer.

How much is car insurance for young drivers?

Young adults pay between $2,854 and $3,535 per year, on average, for a full-coverage auto insurance policy. For state minimum coverage, young adults aged 20 to 25 pay between $782 and $1,020 per year.

While age and driving experience drive high rates for young adults, other factors can influence the cost of coverage at this age. Staying on a parent's policy is the easiest way to reduce the cost of coverage for young adults — and as long as your primary residence is the same as your parents' and any vehicle you drive is garaged there, you may be able to remain on the family policy.

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, including different minimum coverage requirements, which can impact the rates set by every auto insurance company. Additionally, the risk of getting into an accident may vary by location, including your state, city or even ZIP code.

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

How are rates determined for young drivers?

Auto insurance rates for young adults are determined in the same way as they are for older drivers. Several rating factors that determine car insurance premiums include:

• 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. They are also more likely to file a claim because they are typically not as established financially as 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, getting a quote from your insurance carrier may be a good idea 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 and Massachusetts ban the use of credit as a factor in determining auto insurance rates. Car insurance companies in Michigan cannot use your actual credit rating but can use factors that go into your credit rating.
• Gender: Men usually pay higher rates than women 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. California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania ban the use of gender as a rating factor.
• Location: If you live in an area with 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 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 purchase only the 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. Lenders will typically require you to buy collision and comprehensive insurance, 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 affect 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.

Car insurance 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 offer 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.
• Multi-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.
• Alumni association discounts: Many car insurance companies offer alumni association discounts for recent college graduates.
• 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 cover 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

Methodology

Bankrate utilizes Quadrant Information Services to analyze April 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver 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 2022 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.

Age: Rates were calculated by evaluating our base profile with the ages 20-25 (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.