Cheap Auto Insurance for 21-Year-Olds in 2024 (Big Savings From These 10 Companies!)

If you’re looking for cheap auto insurance for 21-year-olds, State Farm, Erie, and Progressive offer the cheapest minimum insurance policies.

At $100 per month for minimum coverage, State Farm has the cheapest insurance rates for 21-year-old drivers. 21-year-olds who practice safe driving habits can save even more by enrolling in State Farm’s usage-based car insurance program Drive Safe and Save.

Car insurance for new drivers typically costs more than for older adults because they’re considered higher-risk drivers. Enter your ZIP code above to get started on finding the cheapest car insurance for 21-year-olds.

#1 – State Farm: Top Overall Pick

Pros

• Extensive agent network: Finding affordable coverage as a 21-year-old driver can be difficult, but you can rely on personalized help from one of State Farm’s local agents.
• Drive Safe and Save: Drive Safe and Save is State Farm’s usage-based insurance (UBI) program that tracks how you drive. Drivers who practice safe habits can save up to 30%.
• Young driver discounts: State Farm offers 13 car insurance discounts, including a few ways for drivers under 25 to save.
• Affordable rates: State Farm is not only the cheapest option for 21-year-old drivers, but it’s also usually the lowest provider for everyone else.
• Solid customer service ratings: Although it struggles in some areas, customer reviews of State Farm tend to be positive. See the reviews and rankings in our full State Farm Auto Insurance Review.

Cons

• Limited online tools: State Farm focuses more on using local agents to sell insurance and less on online sales. Drivers looking for a more modern approach to insurance should probably look elsewhere.
• Higher rates for some drivers: While it’s usually one of the cheapest options on the market, drivers with bad credit scores can probably find lower rates than State Farm.
• Lacking some coverage options: State Farm lacks a few of the most popular car insurance add-ons, including gap insurance.

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#2 – Erie Insurance: Best for Personalized Service

Pros

• Competitive rates: Erie Insurance usually has competitive rates for all drivers, regardless of age. Erie can be particularly affordable for young drivers.
• Excellent customer service: As a smaller company, Erie Insurance dedicates more resources than its larger competitors to ensuring its customers are satisfied with all aspects of its policies.
• Personalized service: Understanding insurance can be difficult when you’re not familiar with it, but Erie makes it easy on young drivers with personalized service. Explore our review of Erie insurance to see the company’s coverage and average rates.
• YourTurn: Sign up for Erie’s UBI program YourTurn to earn rewards for your safe driving. Reward options include gift cards and charitable donations.

Cons

• Quote availability: If a policy from Erie sounds appealing, you’ll need to speak with an agent for a quote. Erie has no online quote option.
• Limited availability: Erie Insurance is available primarily in the Midwest and East Coast. Erie is only available in 12 states.

#3 – Progressive: Best for Drivers on a Budget

Pros

• Name Your Price tool: Looking to stay on a budget? Enter your monthly budget into Progressive’s Name Your Price tool to see matching coverage options.
• Affordable rates: Although some drivers see higher rates, Progressive is generally an affordable insurance option.
• Discount options: Progressive offers ample discount options, making it easy for young drivers to save. Discounts include savings for students, safe driving, and being a loyal customer.
• Snapshot: The average driver saves $156 per year by enrolling in Progressive’s UBI program Snapshot and practicing good driving habits.

Cons

• Claims satisfaction reviews: While many customers report overall satisfaction, Progressive struggles with its claims reviews.
• Higher rates for some drivers: Progressive often has higher rates for people with at-fault accidents on their driving record. Find more details about this provider in our guide: Progressive Auto Insurance Review.

#4 – Nationwide: Best Deductible Savings

Pros

• Multiple discounts: Young drivers will appreciate Nationwide’s selection of 11 discounts, especially if they can bundle a homeowners or renters policy. Explore more discount options in our Nationwide auto insurance review.
• Vanishing Deductible: Sign up for Nationwide’s Vanishing Deductible program to reduce your car insurance deductible by $100 every year you spend claims-free, up to $500 off.
• Affordable rates for bad credit: If your credit score isn’t as high as you’d like, Nationwide might have the lowest rates. Generally speaking, drivers with bad credit scores find affordable policies with Nationwide.

Cons

• High rates for some drivers: While Nationwide is an affordable choice for 21-year-olds, the same can’t be said for people with a DUI on their record.
• Limited local agents: If you’re looking for a face-to-face experience with an agent, Nationwide might not be your best choice.

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#5 – American Family: Best Discount Options

Pros

• Discounts for young drivers: American Family helps keep rates low for young drivers by offering several discounts specific to people under 25. With 18 total discounts, you’ll probably qualify for a few discounts regardless of your age.
• KnowYourDrive: Save up to 30% by signing up for American Family’s UBI program, KnowYourDrive. See if KnowYourDrive is the right UBI program for you in our American Family auto insurance review.
• Customizable coverage options: American Family offers a variety of coverage types so you can customize your policy to suit your needs, including gap insurance and roadside assistance.

Cons

• Rates can be high: American Family’s rates are usually average, but drivers with bad credit scores should probably look elsewhere.
• Limited availability: American Family only sells car insurance in 19 states.

#6 – SafeAuto: Best for Cheap Minimum Coverage

Pros

• Minimum coverage experts: SafeAuto is best suited to drivers looking for the minimum amount of insurance required in their state.
• Excellent online tools: It’s easy to get quotes and sign up for policies online with Safe Auto. Additionally, most SafeAuto policies start as soon as you sign up, giving you immediate coverage.
• High-risk coverage: Some companies won’t work with drivers with multiple accidents, speeding tickets, or DUIs. However, SafeAuto usually provides coverage to high-risk drivers.

Cons

• Limited coverage options: Since SafeAuto specializes in minimum insurance, it lacks other coverage options compared with its larger competitors.
• Not available nationwide: SafeAuto is only available in 19 states. See if SafeAuto is available in your state in our Safe Auto insurance review.

#7 – Travelers: Best Customer Service

Pros

• Ample discounts: Traverlers focuses on discounts for safe driving, which helps decrease rates for younger drivers. You can also find unique discounts with Travelers, like savings for driving a hybrid vehicle.
• IntelliDrive: IntelliDrive offers up to 30% savings to drivers who consistently practice safe driving habits. To enroll in this UBI program, you need to download the app.
• Unique add-ons: Travelers offers a variety of coverage options to meet most driving needs, including gap and rideshare insurance.

Cons

• Average rates: Travelers’s rates are usually average, being neither the cheapest nor most expensive. Most drivers will find cheaper rates elsewhere. For more pricing information, read our Travelers company review
• Customer satisfaction reviews are mixed: Many Travelers policyholders say they love their coverage, but some customers are unsatisfied with the claims process.

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#8 – Liberty Mutual: Best Selection of Add-ons

Pros

• RightTrack: Liberty Mutual’s UBI program offers an immediate 10% discount just for signing up. Your rates can decrease by up to 30% after a 90 observation period.
• Generous discounts: With 16 additional discounts besides the RightTrack program, young drivers should be able to find additional savings. College students maintaining good grades can save with the good student discount. There are also great discounts for younger drivers if you need under-21 car insurance.
• Diverse insurance add-ons: Liberty Mutual offers insurance options you’d typically expect, like collision and comprehensive coverage. You can also find more unique options from Liberty Mutual, like better car or original parts replacement coverage.

Cons

• Rates are generally higher: While Liberty Mutual rates are usually not the most expensive, they’re also not the cheapest. You can learn more about Liberty Mutual’s insurance options in our complete guide: Liberty Mutual Auto Insurance Review.
• Below average claims satisfaction: Liberty Mutual struggles with its claims satisfaction ratings, with many customers citing lengthy processing times. However, Liberty Mutual usually receives praise for its customer service representatives.

#9 – Farmers Insurance: Best for Safe Drivers

Pros

• Signal app: Save up to 15% by being a good driver and downloading Farmers’ Signal app. Learn more about the Signal app in our Farmers auto insurance review.
• Tons of discounts: Farmers Insurance offers one of the biggest selections of discounts, with a whopping 23 possible ways to save. 21-year-olds can save by paying their bills on time, being a good student, and being a safe driver.
• Extensive local agent network: Farmers has an extensive network of local agents to help their customers get the perfect policy to meet their needs.

Cons

• Expensive rates: Farmers is rarely the cheapest option for coverage. If you’re looking for the most affordable coverage possible, Farmers probably isn’t the right choice.
• No coverage in Florida: Florida drivers will need to look elsewhere because Farmers no longer sells new policies in the Sunshine State.

#10 – Allstate: Best for Full Coverage Policies

Pros

• Claims satisfaction guarantee: Allstate is so confident in its ability to resolve your claims quickly that it guarantees your satisfaction. You’ll receive a credit for future premiums if Allstate doesn’t live up to its guarantee.
• Drivewise: Allstate’s UBI program Drivewise offers one of the best discounts on the market. Drivers who consistently practice safe habits can save up to 40%.
• Full-service coverage: If you want more coverage than the bare minimum, Allstate offers plenty of coverage options for a fully comprehensive car insurance policy.
• Excellent discounts: You can save on your policy with one or more of Allstate’s 12 discounts, including savings for being a safe driver and bundling policies. Explore Allstate’s discount options in our Allstate auto insurance review.

Cons

• High rates: No matter who the driver is, Allstate is consistently one of the most expensive options for car insurance.
• Mixed customer reviews: Many customers appreciate their Allstate policies, but the company also has a number of negative reviews about its customer service experience.

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Auto Insurance Rates for 21-Year-Olds

Finding cheap auto insurance as a 21-year-old is more difficult than it is for older adults, but you’ll see noticeably lower rates than teens as long as your driving record is clean.

While many factors affect your rates, you can check how much the average 21-year-old woman pays for coverage below.

Men tend to pay more for their coverage in all age groups, including 21-year-olds. Check below to see how much 21-year-old men typically pay.

As you can see, there can be significant variations in insurance rates. This is why comparing quotes is integral in finding the cheapest coverage in your area. If you skip this vital step, you’ll likely overpay for your coverage.

Factors That Affect 21-Year-Old Auto Insurance Rates

There are many factors that affect car insurance rates that providers take into consideration when determining if they should provide you with coverage, what coverage options to provide, and what they should charge.

While you can explore factors that affect your insurance rates below, you might find it helpful to check the average price of insurance in your state for 21-year-old drivers.

Some of the most common factors they consider include:

• The driving record of anyone on the policy
• The insurance history of anyone on the policy
• The history of claims for each driver

When you are under 21, you will have potentially created years of driving information and insurance histories that any potential or current provider will want to review.

Your driving record is a listing of any citations, violations, or incidents that occur while operating your vehicle; a speeding ticket is one example of this.

Individuals who have a poor driving record may encounter higher premiums as a result; insurance providers do this to offset the potential losses they foresee you claiming through your policy.

Another important factor to keep in mind is the car insurance requirements in your state. Drivers looking for the cheapest coverage should consider a minimum insurance policy, but some states require more coverage than others.

As you can see, your ZIP code is one of the first things a company asks for when you request a quote. You don’t need to know coverage laws, however. An insurance representative will know how much coverage you need in your state.

High-Risk Insurance for 21-Year-Old Drivers

If your driving record is exceptionally poor, you may find yourself unable to obtain coverage through traditional insurance carriers. In this case, you’ll need high-risk auto insurance.

Your insurance history is another factor that many carriers will review, as this is a record of your interactions with your previous insurance carriers and a record of your previous claims.

Your history helps provide your potential or current company with a snapshot of how you work with insurance companies as well as how often you file claims, the amount of the claim settlement, and the number of parties involved.

If your insurance history shows a record of late or incomplete payments, high-value claims, or multiple claims within a short amount of time, your potential or current provider may find themselves unable to provide you with coverage.

These factors are all indicators that you may be at a higher risk than they are equipped to cover. If you find yourself in this classification, you’ll probably find better coverage at one of the best auto insurance companies for high-risk drivers.

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Buying Coverage When You’re Under 21 Years Old

Just because you can purchase coverage doesn’t mean it’s as simple as 1-2-3.

Due to your age, you may experience difficulty finding a company that can provide you the coverage you want at the price you can afford; insurance providers often charge young, inexperienced drivers higher premiums to offset any potential losses.

When you’re under 21, you may have started to do the following:

• live on your own
• be responsible for your bills
• purchased your first car

However, this does not mean that you have purchased car insurance coverage on your own.

Many young adults will remain on a parent or guardian’s policy until they are more established, sometimes waiting until after completing college or landing their first “adult” job.

If you choose to purchase your policy when you’re under 21, it can be another way to increase your knowledge of what being an adult truly entails; managing car insurance, choosing your coverage, and managing your budget are all necessary skills.

Your previous choices up to this point can affect your available coverage options, meaning you may be limited in what insurance companies you can buy coverage through or what coverage options you can select.

Things You Can Expect When Purchasing Coverage

There are several things that an individual under 21 can expect when shopping for a car insurance policy, including:

• Higher premium rates
• Difficulty obtaining coverage
• Limitations on coverage options

As a younger driver, your lack of experience behind the wheel often means insurance companies will see you as a higher risk compared to someone who has had many more years of experience behind the wheel.

While you may not be a poor driver yourself, insurance companies use statistics that aggregate large amounts of data and provide a generalized estimate based on that data. This means that, due to being in your age group, you will be looked at as a higher risk.

Higher-risk individuals often face higher premium rates when purchasing coverage. These higher rates help to preemptively offset the costs that insurance companies predict they will incur while insuring you.

As you continue to grow older and show responsible behaviors, insurance companies will often start to lower your premium as an incentive to continue being responsible behind the wheel.

You may also encounter difficulty obtaining coverage from some insurance providers.

Insurance companies are not obligated to provide an individual with coverage in most cases, meaning they can deny coverage to an individual based on their risk assessment of that individual.

When you are deemed to be a higher risk than they want to insure, they may direct you to search elsewhere.

There may be instances where a provider is willing to provide you with coverage, but they may place restrictions or limitations on the coverage options you can purchase.

This could be as simple as requiring a high-dollar deductible for certain coverage options, or they could restrict entire coverage options from being selected.

You may have to speak to multiple providers to find one willing to work with you and your unique situation.

Find Cheap Auto Insurance for 21-Year-Olds Today

Anytime you purchase coverage, regardless of your age, there are multiple things to keep in mind. Your age is always going to be a factor that any insurance provider will look at when trying to decide if they should provide you with coverage and for what price.

Factors like this are something that insurance providers collect a lot of data about, this then allows them to make informed guesses about your potential risk.

This means that you will need to anticipate higher premium costs when you purchase your policy. As you grow older and show responsible driving habits, your insurance provider may reward you with lower rates.

However, this is something that cannot be changed overnight; you will need a long-term history of responsible habits to show your provider that you are a low-risk policyholder.

Your previous insurance history and your driving record are both going to influence your available coverage options.

Current and future insurance carriers often look at your history with previous insurance companies; this allows them to make some reasonable determinations about what kind of policyholder you may be.

Your driving record, on the other hand, provides an idea of your driving habits and how cautious you are behind the wheel.

Any questions or concerns you have about how your age, your driving record, your insurance history, or any other factors will affect your coverage should be directed to your carrier before purchasing your policy.

Each insurance carrier will address rates and coverage options in different ways, so one carrier may be able to provide you with better rates and coverage options compared to another.

Compare car insurance quotes to see how much you could save on the coverage you need.

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