Auto Insurance for Drivers Under 25 (2021 Rates + Discounts)
Even the cheapest auto insurance for drivers under 25 can cost up to 50 percent more than for an older driver. GEICO and USAA offer the cheapest auto insurance rates for drivers under 25 years old. Shopping around for affordable car insurance rates for young drivers and qualifying for discounts can substantially reduce auto insurance rates for male and female drivers under age 25. Scroll down to learn more.
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UPDATED: Jul 15, 2021
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- Drivers who are 25 or younger pay higher rates for auto insurance. However, your rates will go down after you turn 25.
- The most affordable auto insurance companies for drivers under 25 are GEICO, USAA, and Nationwide.
- If you live at home with your family, see if you can buy insurance through the same carrier to receive a multi-car discount or a multi-line discount.
If you’re looking for cheap auto insurance for drivers under 25, you’ll find auto insurance rates that are higher than average. Young drivers are less experienced drivers, and auto insurance companies issue higher than average rates because of this risk.
Drivers under 25 years old may have to spend more time shopping around to find companies with competitive pricing in the high-risk marketplace. It makes finding cheaper car insurance for first-time drivers difficult.
Read through our guide about what companies are most compatible with younger drivers, what insurance limits you are required to purchase, and what discounts can help you keep your rates low.
For first-time auto insurance consumers, it’s important to understand the different factors that affect auto insurance rates and why your age can impact auto insurance. Many factors can affect the cost of insurance for first time drivers over 25.
Not only do you need to understand how risk factors work, but it’s also essential to learn how to save money on your insurance. Continue reading to learn more. We can help answer the question “how much is auto insurance for a 25-year-old?”
Before you buy car insurance for drivers under 25, shop around to find the best quotes.
If you want to search for cheap auto insurance for drivers under 25 right now, enter your ZIP code into our free quote tool above to see affordable auto insurance for drivers under 25.
Can you get good auto insurance if you’re under 25 years old?
Believe it or not, affordable auto insurance for drivers under 25 years old can be found almost anywhere. However, cheap isn’t always the same as good. The best auto insurance for young drivers is defined as affordable and reliable without compromising your coverage level.
The best way to find the auto insurance coverage you need is to compare rates from multiple companies, shop around, and enroll in a policy that meets all of your needs.
Premiums vary by carrier and by state. In each state, auto insurance companies with a business license to sell auto insurance have to file their rates for approval.
This process was put in place to ensure that consumers aren’t overcharged. If the base rate is justified in each rating group, the company will be approved.
According to NBC News, a driver under 20 added to an existing policy could increase rates by upwards of 80 percent.
In the table below, you can compare average annual rates for auto insurance by age from various leading companies. Pay attention to companies who give low rates particularly to younger drivers.
|Companies||Average Annual Rates for Single 17-Year-Old-Female||Average Annual Rates for Single 17-Year-Old-Male||Average Annual Rates for Single 25-Year-Old-Female||Average Annual Rates for Single 25-Year-Old-Male||Average Annual Rates for Married 35-Year-Old-Female||Average Annual Rates for Married 35-Year-Old-Male||Average Annual Rates for Married 60-Year-Old-Female||Average Annual Rates for Married 60-Year-Old-Male|
As you can see, drivers who are under 25 do pay substantially higher rates than older drivers. Companies like USAA, GEICO, Nationwide, American Family, and USAA sell policies for the most competitive prices for young drivers.
USAA auto insurance offers the cheapest rates, but only active or retired military personnel and their families are eligible to use services from this provider.
So, what is the cheapest auto insurance for drivers under 25-year-old not in the military? And what is the best auto insurance for teenage drivers?
On average, GEICO quotes have the lowest rates for younger non-military drivers.
As you can see, 17-year-old male teens, who have policies with GEICO, will pay $3,966 more annually than 35-year-old drivers. Female teenage drivers can pay $3,350 more per year than 35-year-old drivers.
If you are looking for cheaper car insurance for first time drivers, you may need to spend a decent amount of time looking around. Cheap is not neccesarily the best way to go, you need to make sure you have solid coverage at a price point that works with your budget.
However, you can minimize your costs by seeking out discounts, shopping around for auto insurance, and picking the proper level of coverage.
The type of car you drive will have a significant impact on your rates. For example, sports car auto insurance for drivers under 25 will be more costly than a basic economy sedan.
Keep reading to learn more about the best auto insurance for young adults by company.
What are the best auto insurance companies for new drivers under 25 years old?
Overall, GEICO, USAA, and Nationwide are among some of the cheapest auto insurance providers for drivers under the age of 25.
However, if these companies are less active where you live, auto insurance quotes for drivers under 25 might be much higher than what our data shows.
Therefore, it is important to compare rates from multiple companies when searching for cheap auto insurance for drivers under 25 years old.
It’s harder to find cheap auto insurance for new drivers under 21. Fortunately auto insurance for new drivers over 21 is lower and, once you turn 25, you’ll see a significant decrease in your auto insurance rates.
How much should a 25-year-old male pay for auto insurance? Usually, their rates will be less than 68 percent of what a 17-year-old male pays. Auto insurance for a 25-year-old female can be up to 48 percent less than what a 17-year-old female pays for auto insurance.
What is the cheapest auto insurance for a 22-year-old? The cheapest auto insurance for male and female drivers under 25 years old are usually available through GEICO and USAA.
Don’t forget to ask about discounts you might qualify for. Auto insurance discounts stack, leading to some great savings for young drivers.
Read the next section to learn about what discounts you might be eligible for as a driver under the age of 25.
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Auto Insurance Discounts for Drivers Under 25 Years Old
Most drivers, regardless of age, can qualify for a few auto insurance discounts. Drivers under 25 have several discounts they can receive to help lower their auto insurance rates.
Not all companies will have the same amount of discounts, so it’s worth shopping around before choosing a provider. Below are the discounts that you can get as a young driver. If the savings amount is available, it has been included in our data.
|Companies||Claim Free Discont||Continuous Coverage Discount||Defensive Driver Discount||Driver's Ed Discount||Driving Device/App Discount||Early Signing Discount||Full Payment Discount||Good Credit Discount||Low Mileage Discount||Loyalty Discount||Married Discount||Multiple Policies Discount||Multiple Vehicles Discount||Occupation Discount||On Time Payments Discount||Online Shopper Discount||Paperless Documents Discount||Paperless/Auto Billing Discount||Safe Driver Discount||Students & Alumni Discount||Young Driver Discount|
If you are enrolled in high school or college, you can qualify for good student discounts just by maintaining a B average. You can also take a voluntary driver’s education course for even more savings.
Some companies provide you with a small amount of savings just by paying for your six-month policy in full up front.
If your vehicle has certain safety features or anti-theft devices, you can qualify for even more discounts. Take a look at vehicle-based auto insurance discounts available to young drivers in the table below.
|Companies||Adaptive Cruise Control Discount||Adaptive Headlights Discount||Anti-lock Brakes Discount||Anti-Theft Discount||Daytime Running Lights Discount||Electronic Stability Control Discount||Utility Vehicle Discount||Vehicle Recovery Discount||VIN Etching Discount||Lane Departure Warning Discount||Newer Vehicle Discount||Green Vehicle Discount||Forward Collision Warning Discount|
As you can see, drivers under the age of 25 have a lot of chances to get discounts that help save money on auto insurance. Because these discounts stack, your ability to save adds up quickly.
If you live at home with your parents or they are on your registration, it’s in your best interest to combine your insurance for lower rates. Being on a policy with your parents will qualify you for discounts like multi-car and multi-line, all of which have a big impact on rates.
One of the newer ways to save on auto insurance premiums is to enroll in a telematics program if your auto insurance company has one. Telematics uses a device to record how and where you drive through GPS. Safe drivers can save a lot by letting their insurer see just how safely they drive.
Make a note of any and all discounts you believe you qualify for as a driver. Same goes for the vehicle-based discounts. Then you can easily find out if you qualify for those car insurance discounts by talking to insurance agents from different companies.
How do auto insurance companies determine rates for drivers under 25 years old?
No matter your age, auto insurance providers will use the same major factors when determining your auto insurance rates. Some things will impact your rates a lot, and others only a small amount.
The most common demographics insurance providers consider include your age, gender, driving record, ZIP code, coverage level, and credit history. The car make and model you drive can also impact your rates.
Some states have banned using non-driving factors when determining auto insurance rates, including things like gender, ZIP code, and credit history. If you’re not sure what is and is not allowed where you live, check your local and state laws.
While your auto insurance rates are personalized, insurance companies look at group-based statistics to predict claims. However, you can still get great auto insurance rates for drivers under 25.
Driving Record and Auto Insurance Rates for Drivers Under 25
As a younger driver, you are less experienced than older drivers. Drivers with more experience have a better time reacting to driving hazards than inexperienced drivers.
It might feel like a discriminatory practice, but most states allow insurers to use an applicant’s age to determine how much the driver needs to pay for coverage.
According to the Centers for Disease Control (CDC), teens and young adults have more severe accidents that lead to injury or damage.
Young drivers are also more likely to panic when faced with dangerous situations while driving.
A Naturalistic Teenage Driving Study showed that, although risk declined over time, teenagers were over four times more likely to get into an accident or have a near-miss than their adult counterparts.
Younger drivers are also more likely to be distracted while driving. Around 11 percent of drivers under 20 were in a fatal accident caused by distracted driving.
Drive carefully to prevent adding incidents to your record. Insurance providers are especially harsh on younger drivers who commit traffic violations. In the table below are rates based on your driving record.
|Companies||Average Annual Rates by Clean Driving Record||Average Annual Rates With One Accident||Average Annual Rates With One DUI Conviction||Average Annual Rates With One Speeding Violation|
As the data proves, drivers with a clean record will pay a lot less than drivers with a speeding ticket, DUI, or an accident. While some incidents fall off your record after only three years, the next drop is when you have five years of experience.
If you have a clean driving record, it’s only natural to be upset when you learn that you’re still classified as a high-risk driver just because of your age.
But remember, young drivers are new to the game. Having less road experience is one of six reasons why young drivers’ auto insurance costs more.
Credit History and Auto Insurance Rates for Drivers Under 25
Some insurance providers will consider your credit score when calculating your auto insurance rates. However, most young drivers do not have an established credit history like their older-driver counterparts.
This can put you at another disadvantage when it comes to your rates. Check out the table below to see how annual auto insurance rates are impacted by your credit score.
|Companies||Average Annual Rates Based on Good Credit||Average Annual Rates Based on Fair Credit||Average Annual Rates Based on Poor Credit|
Drivers with poor credit will pay more for insurance than drivers who have fair or good credit.
Commute Length and Auto Insurance Rates for Drivers under 25
If you have a long or short commute, that can also affect your auto insurance rates. If you work, or commute to school, those miles can sometimes add up.
Examine the average annual auto insurance rates by yearly commute mileage in the table below.
|Companies||Average Annual Auto Insurance Rates by 10-mile commute.|
6,000 annual mileage.
|Average Annual Auto Insurance Rates by 25-mile commute.
12,000 annual mileage.
The difference between a 25-mile commute and a 10-mile commute can sometimes be as low as $50 annually. Even though you might end up paying more for a longer commute, fortunately, it wouldn’t be a drastic increase.
However, some companies charge the exact same rates regardless of how much you drive. If you’re under 25 and drive substantially more than average, definitely add those companies to your comparison list.
What kind of auto insurance do you need if you’re under 25 years old?
Auto insurance laws vary by state. Therefore, the legal minimum level of coverage you’ll be required to have will change depending on where you live.
Find your state in the table below to see how much you’ll be expected to carry.
|State||Minimum BI & PD Liability Limits||Required Insurance Policies|
|Alabama||25/50/25||BI + PD Liability|
|Alaska||50/100/25||BI + PD Liability|
|Arizona||15/30/10||BI + PD Liability|
|Arkansas||25/50/25||BI + PD Liability, PIP|
|California||15/30/5||BI + PD Liability|
|Colorado||25/50/15||BI + PD Liability|
|Connecticut||25/50/20||BI + PD Liability, UM, UIM|
|Delaware||25/50/10||BI + PD Liability, PIP|
|District of Columbia||25/50/10||BI + PD Liability, UM|
|Florida||10/20/10||BI + PD Liability, PIP|
|Georgia||25/50/25||BI + PD Liability|
|Hawaii||20/40/10||BI + PD Liability, PIP|
|Idaho||25/50/15||BI + PD Liability|
|Illinois||25/50/20||BI + PD Liability, UM, UIM|
|Indiana||25/50/25||BI + PD Liability|
|Iowa||20/40/15||BI + PD Liability|
|Kansas||25/50/25||BI + PD Liability, PIP|
|Kentucky||25/50/25||BI + PD Liability, PIP, UM, UIM|
|Louisiana||15/30/25||BI + PD Liability|
|Maine||50/100/25||BI + PD Liability, UM, UIM, Medpay|
|Maryland||30/60/15||BI + PD Liability, PIP, UM, UIM|
|Massachusetts||20/40/5||BI + PD Liability, PIP|
|Michigan||20/40/10||BI + PD Liability, PIP|
|Minnesota||30/60/10||BI + PD Liability, PIP, UM, UIM|
|Mississippi||25/50/25||BI + PD Liability|
|Missouri||25/50/25||BI + PD Liability, UM|
|Montana||25/50/20||BI + PD Liability|
|Nebraska||25/50/25||BI + PD Liability, UM, UIM|
|Nevada||25/50/20||BI + PD Liability|
|New Hampshire||25/50/25||Financial Responsibility only|
|New Jersey||15/30/5||BI + PD Liability, PIP, UM, UIM|
|New Mexico||25/50/10||BI + PD Liability|
|New York||25/50/10||BI + PD Liability, PIP, UM, UIM|
|North Carolina||30/60/25||BI + PD Liability, UM, UIM|
|North Dakota||25/50/25||BI + PD Liability, PIP, UM, UIM|
|Ohio||25/50/25||BI + PD Liability|
|Oklahoma||25/50/25||BI + PD Liability|
|Oregon||25/50/20||BI + PD Liability, PIP, UM, UIM|
|Pennsylvania||15/30/5||BI + PD Liability, PIP|
|Rhode Island||25/50/25||BI + PD Liability|
|South Carolina||25/50/25||BI + PD Liability, UM, UIM|
|South Dakota||25/50/25||BI + PD Liability, UM, UIM|
|Tennessee||25/50/15||BI + PD Liability|
|Texas||30/60/25||BI + PD Liability, PIP|
|Utah||25/65/15||BI + PD Liability, PIP|
|Vermont||25/50/10||BI & PD Liab, UM, UIM|
|Virginia||25/50/20||BI + PD Liability, UM, UIM|
|Washington||25/50/10||BI + PD Liability|
|West Virginia||25/50/25||BI + PD Liability, UM, UIM|
|Wisconsin||25/50/10||BI + PD Liability, UM, Medpay|
|Wyoming||25/50/20||BI + PD Liability|
To help you better understand what each of these acronyms mean, we’ve compiled a list of common auto insurance terms and definitions and put them into the table below for your convenience.
|BI||Bodily Injury||Covers bodily injury damage for the other driver in an accident you are found liable for.|
|PD||Property Damage Liability||Covers property damage for the other driver in an accident you are found liable for.|
|PIP||Personal Injury Protection||Covers your medical expenses, lost wages, and other damages when involved in an accident.|
|UM||Uninsured Motorist||Covers damages to your vehicle if you are hit by a driver without auto insurance.|
|UIM||Underinsured Motorist||Covers damages to your vehicle if you are hit by a driver with an insurance policy that does not meet the state's minimum legal standards.|
If you own your car outright, you can buy just your state’s minimum requirements to help keep your rates low. Usually this will just be a small amount of liability auto insurance.
However, a vehicle that you’re financing likely requires a fuller coverage, more expensive policy.
In the next sections, we’ll discuss these different auto insurance policy types in more detail to help you determine if any extra coverage is right for you.
Liability Auto Insurance for Drivers Under 25 Years Old
Liability auto insurance coverage is made up of bodily injury liability and property damage liability.
Bodily injury liability means that your auto insurance company will pay for any bodily injuries of one or more people if you’re at fault in an accident. Property damage liability pays for another driver’s property, such as their vehicle.
Liability policies are usually low-cost and easy to find. However, this type of coverage will not pay for damage to yourself or your own property. You will need to invest in other policies if you want your own vehicle to be protected by your insurer.
Collision Auto Insurance for Drivers Under 25 Years Old
One optional coverage type that protects your car while it is in motion is collision coverage. Collision auto insurance pays for damage to your vehicle if you hit another car, or something like a tree or pole.
Collision coverage pays for these damages regardless of who is at fault for the accident. However, there is a deductible associated with this type of policy. A deductible is an amount that you pay out of pocket for damages before your provider steps in.
If you want this type of protection but need to keep your rates low, you can increase your deductible amount. Just be careful not to increase it too high, or else you will not be able to rely on your provider for smaller collision claims.
Comprehensive Auto Insurance for Drivers Under 25 Years Old
Another optional coverage type that protects your vehicle while it is parked is comprehensive coverage. If your car is in a fire, flood, or hit by a fallen object, comprehensive insurance will cover the cost damages.
You’ll also be protected from vehicle theft. Like collision coverage, there is also a deductible associated with comprehensive insurance.
Adding collision and comprehensive auto insurance to your policy will increase your rates by a few hundred dollars. This is not always affordable for drivers under the age of 25.
Remember to take advantage of the discounts mentioned above to help keep your rates as low as possible.
Other Auto Insurance Coverages for Drivers Under 25 Years Old
There are a few other auto insurance policy options that you might consider adding to your plan as a driver under the age of 25. Some states also require these coverages as part of the minimum standards.
These coverage options include personal injury protection (PIP) and uninsured/underinsured motorist coverage (UIM/UM).
Personal injury protection covers injuries caused to you from an accident regardless of who is at fault. It can also pay for other miscellaneous costs outside of medical bills, like missed work payments.
Uninsured/underinsured motorist coverage pays for bodily injury and property damage after you’re in an accident with a driver who’s uninsured or underinsured.
If a driver doesn’t have enough on their coverage limit, underinsured coverage will help pay for your losses.
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How to Save Money on Auto Insurance for Drivers Under 25 Years Old
When looking for an auto insurance company for drivers under 25, make sure to check out any discounts the company offers.
Besides taking advantage of auto insurance discounts for drivers under 25, there are a few other ways you can keep your rates low.
If it is a viable option for you, consider staying on your parent’s auto insurance policy and paying them the difference in costs. Because of multi-car discounts, your rates will be quite a bit lower this way.
You should also be careful to keep your driving record very clean. Not only will you qualify for safe driver discounts, but you will also prove yourself to be lower-risk to insure.
Finally, drive a car that is low-cost to insure. According to the Insurance Institute for Highway Safety, some cars are less expensive to insure than others for young drivers.
Look for a vehicle that is low-cost to repair or replace in the event you need to file a claim. Also, pay attention to safety ratings and crash test ratings.
Insurance loss ratios can also give you a good idea about how much a certain car model will cost you to insure.
Auto Insurance for Drivers Under 25: The Bottom Line
We hope you enjoyed this guide and learned a lot about how to buy auto insurance for drivers under 25. If you are under 25, there are many options for your auto insurance.
Look for different discounts you qualify for, and be sure you get the right coverage for your specific needs. If you’re shopping for a new car as well as an insurance policy, purchase a vehicle that has lower-cost auto insurance rates.
Remember, after you turn 25, your rates will drop substantially, especially if you keep your driving record clean. You won’t have to pay high rates forever, and if you do have high rates, you can get discounts.
Are you ready to buy auto insurance for drivers under 25? Simply enter your ZIP code into our free quote tool below to compare auto insurance rates for drivers under 25 from multiple companies at once.