Auto Insurance for Drivers Under 25 [2020 Rates + Discounts]

The cheapest auto insurance for drivers under 25 can cost up to 50% more than for an older driver. Geico and USAA offer the cheapest rates for teen drivers. Shopping around for the best auto insurance rates and qualifying for discounts like Good Student and Drivers Ed Courses can reduce car insurance rates for drivers under 25.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
Licensed Insurance Agent

UPDATED: Jun 17, 2020

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Things to remember...

  • Auto insurance companies use many different factors to determine your insurance rates.
  • Drivers who are 25 or younger often pay higher rates for auto insurance.
  • Rates go down after three years and then again after five years.
  • The best auto insurance for drivers under 25 will include discounts for things like good grades and driver safety courses
  • 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 younger and are looking for auto insurance, you will find that the process of getting auto insurance for someone under 25 years old is the same for anyone at any age.

The only difference is, as a younger driver, you may have to spend more time shopping around to find companies with competitive pricing in the high-risk marketplace. And if you add in additional risk factors, such as turbo car insurance for a driver under 25, shopping around becomes even more important. Luckily, there are respected companies that welcome young drivers by charging them fair rates.

For first-time auto insurance consumers, it’s important to understand the factors that determine your auto insurance rates and why your age can have such a dramatic effect on what you pay for the same amount of coverage. Not only do you need to understand how risk factors work, but it’s also important to learn how to save money on your insurance. Here’s a consumer guide to help.

If you’re looking to get rates for a younger driver, enter your ZIP code above. You can find cheap auto insurance rates for teen drivers and compare.

How much more will you pay for auto insurance when you’re young?

Premiums vary by carrier and by state. In each and every state, carriers that have 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.

If a driver under 20 is added to an existing policy, it will lead to an average premium increase of 80 percent, according to NBC News.

Increases for drivers 20 to 25 are typically around 40 to 50 percent. If a young driver is going to buy their own insurance, their premiums depend on all of the rating factors. Below shows what’s the best auto insurance for teenage drivers.

Average Annual Auto Insurance Rates by Marital Status, Gender, and Age
CompaniesMarried 60-year-old femaleMarried 60-year-old maleMarried 35-yea-old femaleMarried 35-year-old maleSingle 25-year-old femaleSingle 25-year-old maleSingle 17-year-old femaleSingle 17-year-old male
State Farm$1,873.89$1,873.89$2,081.72$2,081.72$2,335.96$2,554.56$5,953.88$7,324.34
American Family$1,992.92$2,014.38$2,202.70$2,224.31$2,288.65$2,694.72$5,996.50$8,130.50
Liberty Mutual$3,445.00$3,680.53$3,802.77$3,856.84$3,959.67$4,503.13$11,621.01$13,718.69
Get Your Rates Quote Now

Drivers who are under 25 have higher rates. If you are a teen paying for insurance, you pay thousands of dollars more than older drivers. The type of car you choose will have a big impact on rates as well. Sports car insurance for drivers under 25 will be more costly than a basic sedan.

So, what is the cheapest auto insurance for under 25? What is the best auto insurance for teenage drivers?

State Farm has the lowest rates for non-military drivers. Male teens, 17 years old, who have policies with State Farm will pay $5242.62 more than drivers 35-year-old drivers. Female teenage drivers can pay $3872.16 more than drivers 35 years old. Overall, Geico, USAA, and Progressive car insurance are among the cheapest options.

Although close in age, 25-year-olds can pay significantly less for insurance than teenage drivers.

How much should a 25-year-old male pay for auto insurance? Less than 68 percent than a 17-year-old male. Car insurance for a 25-year-old female can be 48 percent less than a 17-year-old female for auto insurance.

So, what is the cheapest auto insurance for a 22-year-old? Both males and females get the best rates at Geico and USAA, though some states like California have made it illegal to charge based on your gender.

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What age does your auto insurance rate go down?

Your rates won’t stay high forever. The key to getting a break in your premiums is to keep a clean driving record.

As long as you don’t get into accidents or get cited for moving violations, you should see a steady drop in your rates each year.

One of the more dramatic drops will be when you have three years of clean driving experience because you’ll receive a Good Driver Discount. The Insurance Information Institute notes that drivers who meet the following criteria may be eligible for this discount:

  • Maintain at least a “B” average in school
  • Take a recognized driver training course
  • A college student who attends school at least 100 miles from home and don’t bring their vehicle to campus

Drive carefully to prevent adding incidents to your record. Below are rates based on your driving record.

Average Annual Auto Insurance Rates by Driving Record
CompaniesClean recordWith one accidentWith one DUIWith one speeding violation
American Family$2,693.61$3,722.75$4,330.24$3,025.74
State Farm$2,821.18$3,396.01$3,636.80$3,186.01
Liberty Mutual$4,774.30$6,204.78$7,613.48$5,701.26
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Drivers with a clean record will pay a lot less than drivers with a speeding ticket, DUI, or an accident. After three years, the next drop is when you have five years of experience. Your rates will continue to get lower until you get nine years of safe driving experience with continuous auto insurance.

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, which all have a big impact on rates.

Why does age affect auto insurance rates?

Auto insurance companies have several factors that help them determine how much you will pay for auto insurance. If you want cheap car insurance for new drivers under 21, you may have noticed that auto insurance is more expensive and sometimes twice as much as it is for drivers who are older.

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.

In states where using age is prohibited, insurers get around the rule by considering how many years the driver has been licensed to place the applicant into a risk class.

A Naturalistic Teenage Driving Study showed that, although risk declined over time, teenagers over four times more likely to get into an accident or have a near-miss than their adult counterparts. The Insurance Institute for Highway Safety (IIHS) reports a fatal crash rate that is three times higher for drivers 16-19 versus those 20 and over.

You can learn more about how your auto insurance risk is calculated here.

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.

Your driving record would help auto insurance companies analyze the risk of insuring you. If you have an unproven driving record, there is nothing that insurance companies can go on, so they assume you are high risk.

Drivers who are younger are statistically more likely to engage in more risky driving behaviors.

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Why are young drivers more at risk?

While your rates are personalized, insurance companies look at group-based statistics to predict claims. 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.

The CDC notes that studies show teens and young adults have more serious accidents that lead to injury or damage, which is why an insurance company will charge drivers in this demographic more.

Young drivers are more likely to panic when faced with dangerous situations while driving. 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.

As time passes, inexperienced drivers will see their rates go down as long as they are safe.

How do auto insurance companies determine rates?

Not only do companies consider your age and your driving experience they will consider dozens of other factors that are all used to indicate how likely you are to have a loss. The video below comes from Allstate.

The carrier has a base rate which will fluctuate as each factor is considered.

Some of the risk factors that determine your auto insurance rates include:

  • your address
  • driving record
  • what kind of car you have
  • mileage
  • credit score
  • job
  • education
  • gender
  • age
  • amount of years driving
  • your policy
  • level of coverage
  • discounts available
  • the deductible

In certain states, you will not have to worry about insurance companies using your age. Some states have laws that prohibit auto insurance companies from using your credit score. Below are rates based on your credit score.

Average Annual Auto Insurance Rates by Credit Score
State Farm$2,174.26$2,853.00$4,951.20
American Family$2,691.74$3,169.53$4,467.98
Liberty Mutual$4,388.18$5,604.24$8,802.22
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Drivers with poor credit will pay more for insurance than drivers who have fair or good credit. If you have a long or short commute, that can also affect your auto insurance rates. Below are rates by commutes.

Average Annual Auto Insurance Rates by Commute
Companies10-mile commute.
6,000 annual mileage.
25-mile commute.
12,000 annual mileage.
State Farm$3,175.98$3,344.01
American Family$3,401.30$3,484.88
Liberty Mutual$5,995.27$6,151.63
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Drivers with long commutes can pay more than drivers with shorter commutes. Some companies charge the same rate for a long and short commute. The difference between a 25-mile commute and a 10-mile commute can sometimes be as low as $50. Even though you would be paying more for a longer commute it wouldn’t be a drastic increase.

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Why does auto insurance go down when you turn 25?

Finding an auto insurance policy can take some time. If you are 25 years old or younger, you may not find the best premiums for auto insurance. Insurance companies like to target niche markets. Some target people with serious moving violations and others target young drivers under 25.

Shopping around will help you seek out the companies that have fair pricing in your niche. This means you shouldn’t go with the first company that gives you quotes. You will want to do some research before picking a company to get coverage from. Some companies, while very popular, may not give you the best rates.

When comparing auto insurance rates it would be best to compare to at least three or four other companies.

Since comparing auto insurance companies takes time you can use a comparison tool to compare quotes from many companies at once. After entering your home ZIP code, you’ll be able to look over instant local insurance quotes and save a lot of time. Using a comparison tool will provide a natural portal for auto insurance shoppers without the bias of an auto insurance company.

If you already have an auto insurance policy, do not cancel it. Wait until you get your new policy. You don’t want to be without insurance for there will be penalties to pay.

What discounts are available for drivers under 25?

Find out if you qualify for an auto insurance discount from your company. Most drivers can qualify for a discount. 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. Below are the discounts that you can get as a driver under 25.

Auto Insurance Discounts for Drivers Under 25
Auto Insurance DiscountsAllstateAmerican FamilyFarmersGeicoLiberty MutualNationwideProgressiveState FarmTravelersUSAA
Adaptive Cruise Controlxxx
Adaptive Headlightsxxxx
Anti-lock Brakesxxxxxxxxxx
Claim Freexxxxxxxxxx
Continuous Coveragexxxxxx
Daytime Running Lightsxxxxxxxxx
Defensive Driverxxxxxxxxxx
Distant Studentxxxxxxxxx
Driver's Edxxxxxxxxx
Driving Device/Appxxxxxxxxx
Early Signingxxxxxxxx
Electronic Stability Controlxxxxxx
Emergency Deploymentx
Family Legacyxxxx
Family Planxxx
Farm Vehiclexxx
Federal Employeexxx
Forward Collision Warningxxx
Full Paymentxxxxxxx
Further Educationxxxx
Good Creditxxx
Good Studentxxxxxxxxxx
Green Vehiclexxxx
Lane Departure Warningxxx
Life Insurancexx
Low Mileagexxxxxxxxxx
Multiple Drivers
Multiple Policiesxxxxxxxxxx
Multiple Vehiclesxxxxxxxxx
New Addressx
New Customer/New Planx
New Graduatex
Newer Vehiclexxxxxxxx
Newly Licensedx
On Time Paymentsxx
Online Shopperx
Paperless Documentsxxxxx
Paperless/Auto Billingxxxxxxxxx
Passive Restraintxxxxxxxxxx
Safe Driverxxxxxxxxx
Seat Belt Usex
Students & Alumnixxxx
Young Driverxxx
Get Your Rates Quote Now

Below are the percentages you can get for your discounts.

Auto Insurance Discount Percentage for Drivers Under 25
Auto Insurance DiscountsAllstateAmerican FamilyFarmersGeicoLiberty MutualNationwideProgressiveState FarmTravelersUSAA
Adaptive Cruise Control5
Adaptive Headlights5
Anti-lock Brakes105555
Claim Free352610152312
Continuous Coverage15
Daytime Running Lights2155
Defensive Driver1010105105103
Distant Student35107
Driver's Ed1010101583
Driving Device/App204030402050305
Early Signing1081012
Electronic Stability Control25
Emergency Deployment25
Family Legacy10
Family Plan25
Farm Vehicle10
Federal Employee810
Forward Collision Warning5
Full Payment10$57.5
Further Education1015
Good Student201522.5102583
Green Vehicle1051010
Life Insurance
Low Mileage30
Multiple Policies10102010121713
Multiple Vehicles25102010208
New Address5
New Graduate5
Newer Vehicle30401012
Newly Licensed5
On Time Payments515
Online Shopper7
Paperless Documents105$50
Paperless/Auto Billing5$30$233
Passive Restraint3030402040
Recent Retirees4
Safe Driver45153531152312
Seat Belt Use15
Senior Driver10
Students & Alumni107
Switching Provider10
Utility Vehicle15
Vehicle Recovery102535255
VIN Etching5
Young Driver$75
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Depending on which discount you get you can save a lot on auto insurance. Check out this video on Good Student Discounts.

The video above comes from First Quote Insurance.

If you use Liberty Mutual for coverage you have a chance to get many discounts that can help you save money on auto insurance. Contact your insurance company to see which discounts are available

How much is auto insurance for a new driver over 25?

If you’re looking for insurance for first-time drivers over 25, it’s not as bad as if you’re starting out at 17. American Family and USAA have the best rates for females, but Geico and USAA have the best rates for males. Note that USAA is only available to military personnel and their families.

The Bottom Line: Auto Insurance for Someone Under 25

We hope you enjoyed this guide and learned a lot about auto insurance for drivers under 25. If you are under 25 there are many options for auto insurance. After you turn 25 your rates can drop. You don’t have to pay high rates and if you do have high rates you can get discounts.

If you’re looking for the best car insurance for new drivers under 25, enter your ZIP code below to compare auto insurance rates from multiple companies at once.

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Compare quotes from the top auto insurance companies and save!

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