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.

Key takeaways
  • When seeking coverage for young adults, you may want to start by generating quotes from major auto insurers Geico, Nationwide and State Farm – which we found to offer low average premiums, wide coverage options and the most competitive potential discounts to young adults.
  • Since auto insurance can be pricey when you’re young, you may want to choose a carrier that offers niche discounts. For instance, Geico offers discounted rates to more than 800 professional and alumni groups.
  • What makes car insurance rates so expensive for young drivers is their inexperience compared to older drivers, but numerous factors, such as driving record, location, mileage and vehicle make and model also affect the cost of car insurance.

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Best car insurance for young adult drivers

Bankrate’s insurance editorial team chose the best car insurance companies for young drivers by searching for the companies that offer the best discounts for young adults. Our top picks for helping them save on premiums are Geico, Nationwide and State Farm.

To help you see how much you might spend on auto insurance, Bankrate assessed the most recent premium data from Quadrant Information Services. However, keep in mind that your actual rate may depend on factors such as if you are on a parent’s plan, are married or own a home or condo. For the purposes of determining the average cost of car insurance for young adults across the U.S., the rates cited here are 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.

Pros Cons
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 complaint index rating of 1.70 from the National Association of Insurance Commissioners (NAIC), indicating that Geico received almost twice as many complaints as other insurance companies.
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 customization, 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.

Pros Cons
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, Louisiana and 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 most college students who live on campus spend less time behind the wheel, limited driving and good driving habits may lead to great savings. Drivers get a 10% discount just for signing up for this telematics program and can earn up to a 40% discount 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.

Pros Cons
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. Many factors play a role in determining car insurance rates, such as your driving history, the type of car you drive and the coverage options you choose, but a major component for young drivers is age and gender. Though not permitted in all states, the age of a driver and their gender could have an influence on their car insurance rates.

In Hawaii, age is not permitted as a rating factor for car insurance companies, and in California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania, gender is not allowed as a rating factor.

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 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 may vary.

Age Male Female % Difference
Age 20 $4,098 $3,492 14%
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.

Car insurance company Average annual 20-year-old full coverage premium Average annual 21-year-old full coverage premium Average annual 22-year-old full coverage premium Average annual 23-year-old full coverage premium Average annual 24-year-old full coverage premium Average annual 25-year-old full coverage premium
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 $3,124 $2,665 $1,719 $1,627 $1,512 $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 prohibits 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.
  • Automobile make and model: Some cars are more expensive 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, Michigan and Washington do not permit the use of credit as a factor in determining auto insurance rates.
  • 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).
  • Location: Car owners who live in areas prone to car theft and vandalism may pay more for auto insurance. 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. People who only use their cars occasionally usually pay lower rates than people who are on the road more often.
  • Types and amount of coverages: Drivers who only purchase minimum required coverages, 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, or should I purchase a standalone 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.

Should I buy my teenager a new or used car?

There are a lot of factors that 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. If you feel comfortable insuring a vehicle with liability only rather than full coverage, meaning that the insurer will not cover damage to the vehicle, that can help keep your auto insurance cost lower.

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 coverages that meet 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. Hawaii rates indicate age is not a contributing factor.