Best Cheap Car Insurance for Teens: Top 5 in 2023

Best Cheap Car Insurance for Teens
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Due to the high risk that young, inexperienced drivers pose to insurance companies, teen car insurance costs tend to be rather high. According to our review of costs from 147 vehicle insurance providers, adding a teen driver to a family’s policy results in an average annual increase of $2,182, effectively doubling car insurance expenses. In this article, we will discuss the best cheap car insurance for teens and the average cost.

What Is Cheap Car Insurance for Teens and How Does It Work?

Finding cheap car insurance for teenagers can be challenging due to their lack of driving experience and higher risk factors. However, there are strategies to reduce costs. Firstly, consider adding your teen to your existing policy rather than getting them a separate one. Many insurance companies offer multi-car discounts, which can save you money. Additionally, encourage your teen to maintain good grades, as some insurers provide discounts to students with a certain GPA.

Another option is to have your teenager take a defensive driving course, which can not only improve their driving skills but also lead to insurance discounts. Furthermore, consider choosing a safe and practical car for your teenager. Insurance premiums are often lower for vehicles with high safety ratings and features.

Shopping around and comparing quotes from different insurance providers is crucial. Each company evaluates risk differently, so getting multiple quotes allows you to find the most affordable option for your teen’s coverage.

Lastly, raising your deductible can lower the cost, but it’s important to weigh the potential savings against the out-of-pocket cost in case of an accident. Remember, maintaining a clean driving record and encouraging responsible driving habits can lead to lower insurance rates over time.

How Much Does Car Insurance for Teens Cost?

Our research shows that adding teens to an existing car insurance plan will cost an average of $1,951 annually. 

Insuring a young driver on their own policy costs an eye-popping $6,598 annually on average throughout the country. That’s why most families opt to have their teenagers remain on their health insurance plans rather than pay out the money for their own. 

The final cost of insurance for you or your teen will be determined by a number of factors, including:  

#1. Insurer

Insurers’ rates vary widely; some provide much cheaper insurance for teens than others. We advise that you shop around for vehicle insurance rates before committing to coverage. 

Our research shows that USAA and Erie have the cheapest car insurance for teens; however, all of the companies listed below are cheaper than the national average. 

CompanyTeen on Parent PolicyTeen on Own Policy
American Family$1,556$5,346
State Farm$1,633$5,408
The average cost of car insurance for teens by company 

#2. Age

Teenage drivers’ rates are notoriously high since their inexperience on the road is directly related to their young age. The National Highway Traffic Safety Administration reports that the danger of an accident is increased by 23 times for teenage drivers who text while operating a motor vehicle due to their inexperience behind the wheel.

If a teenager obtains their license at 16 and has a spotless driving record, they can expect to pay much less for vehicle insurance after they turn 19. 

Driver AgeTeen on Parent PolicyTeen on Own Policy
The average cost of car insurance for teens by age

#3. Gender

Male teen drivers are more likely to engage in risky behaviors like drinking and driving or speeding, according to statistics from the Centers for Disease Control and Prevention (CDC). Male teen drivers account for two-thirds of all teen driver fatalities, so accidents involving teenage male drivers are particularly dangerous. For this reason, many insurance companies place a surcharge on male drivers. 

While several states in the United States apply different rates based on a person’s gender, the following states prohibit such differentiation: California, Hawaii, Maine, Massachusetts, Michigan, North Carolina, and Pennsylvania. 

#4. Vehicle Make and Model

No matter your age, you’ll pay more or less for car insurance depending on the vehicle you or your teen drive. The overall rate is influenced by a number of factors, including the cost to repair or replace a vehicle, the car’s safety rating, and the chance of theft. 

#5. Driving Record

Car insurance premiums for teens tend to be higher than for drivers of any other age group because they typically have no driving history to speak of. When it comes time to renew insurance, though, prices can go up if there is an accident or moving infraction.

How to Find the Best Car Insurance for Teens

Even though adding a teen to your car insurance plan will result in a significant cost rise, there are steps you can take to lessen the blow on your budget.

#1. Keep Your Teen on Your Insurance Plan

It is generally more cost-effective for parents to include their teenagers on their own car insurance policies rather than purchase separate policies for each teenage driver. If you’re not sure, it’s a good idea to get quotations for both possibilities from your insurance company or shop around online to see how much other policies might cost. Also, getting many quotes to see which option is the most affordable is not going to cost you anything.

#2. Verify That You Are Receiving Discounts

Teens can benefit from “good student” discounts (usually for a B average or higher) and “student away at school” discounts (often for those attending college). You may be eligible for a discount on the student’s costs if they attend college more than 100 miles from home and do not have access to a car.

Insurance programs tailored to young drivers often offer discounts and instruct teens in safe driving practices. In addition, you can save money on car insurance in the long run if your teen stays accident-free.

#3. Look Into Companies That Provide Accident Forgiveness

Insurance companies often raise premiums by 40% if you cause an accident that results in injuries and by 38% if the accident results in property damage.

A few insurers provide “accident forgiveness” policies. Insurers will not raise premiums as a result of a single accident if this option is selected. If you decide to switch insurance carriers in the future, the accident will still show up on your driving record and may increase your premiums.

Also, not all drivers are eligible to participate in accident forgiveness programs offered by car insurance companies. All specified drivers on the policy must have been accident-free for a minimum number of years.

In addition, insurance companies typically raise costs for drivers who opt into accident forgiveness programs. According to our estimates, the annual expense ranges from $15 to $60.

#4. Consider Insurance Providers Who Offer Replacement Vehicles

If your car is totaled, new car replacement coverage will pay for a brand-new vehicle of the same make and model (less your deductible). If you have this insurance, you won’t have to pay the difference between what your car is currently worth and what it would be worth if it were brand new.

Families with teens who drive may benefit from purchasing new car replacement insurance.

Furthermore, replacement with a brand-new vehicle is not available to all policyholders. Collision and comprehensive coverage, which reimburses you for damage to your own vehicle, are almost always required. Most insurance companies also stipulate that your car be no more than a few model years old and have fewer than a predetermined number of miles on the odometer, such as 24,000. New-for-old coverage is not available for very old or high-mileage cars.

#5. Shop Comparison

If you haven’t shopped around for car insurance costs in a while and you have a teen driver in the household, now might be an excellent time to do so. We looked into other insurance providers and found that the annual premium for two parents and a 16-year-old with Erie and USAA is a little over $4,000. That’s far less than the average annual premiums at Farmers and Allstate, which are both over $7,000.

Does Credit Score Affect Car Insurance?

Yes, your credit score can affect your car insurance premium. Insurance firms often use a customer’s credit history to calculate the likelihood that they will file a claim. Car or home insurance rates tend to be cheaper for people who have better credit ratings since they are seen as less of a risk. However, the exact effect of your credit score on your rate can differ by insurance provider and by local and national regulations. It’s smart to check in with your insurer every so often to see if your credit rating is having any effect on your auto insurance premiums.

Best Cheap Car Insurance for Teens

Teens can get the cheapest rates on car insurance from Travelers, USAA, and Geico. Depending on factors including age, location, and gender, young drivers can expect to pay anywhere from $1,623 to $3,192 annually for their own auto insurance coverage. The average annual premium for family coverage after adding a teenager is $2,047. 

Due to their inexperience and higher accident risk, insurance rates for teenage drivers are often higher than for older drivers. That’s why it’s crucial that you search around for insurance policies to ensure you’re getting the best rate possible. Here is an overview of the best cheap car insurance for teens:

#1. Geico

Because of its low prices and several discounts, Geico is one of the cheapest car insurance providers for teens. Teenagers may expect to pay around $1,355 annually for Geico’s minimal coverage policy. Geico has received high marks from both the editors at WalletHub and its own consumers, and it is routinely ranked as one of the least expensive insurance providers overall.

#2. Mercury

Mercury is an excellent option for teens in the 11 states it serves because of its low pricing and wide availability. Although the company’s base premiums are higher than those of other rival insurance providers, they are nonetheless competitive. Because of its focus on basic car insurance and its limited selection of specialty policies, Mercury is a decent option for teens in search of cheap insurance coverage.

#3. AAA

When it comes to car insurance for teens, AAA is among the cheapest options. AAA has received high marks from customer advocacy organizations and offers numerous discounts for young drivers. These discounts might range from good student to new driver to defensive driving.

AAA also offers a service that will appeal to parents: AAADrive. With this program, you may set alerts to go off whenever your adolescent crosses particular virtual lines, whether they pertain to speed, time of day, or location.

#4. Grange

Teens can take advantage of Grange Car Insurance’s cheap rates and high customer satisfaction ratings. In addition to the minimum state-mandated coverage, the company provides a wide variety of optional coverages and benefits for drivers, such as new-vehicle replacement and injury protection for family pets. In addition, Grange provides members with access to 17 vehicle insurance savings. However, only 13 of the 50 states offer any sort of coverage.

#5. USAA

USAA is a cheap option for drivers who meet the requirements, but it is offered only to military personnel, veterans, and their families. It provides not only a number of reductions that young drivers may take advantage of but also a number of coverage enhancements, including roadside assistance and accident forgiveness, that can help policyholders out in the long run.

At What Age Is Car Insurance Most Expensive?

Car insurance premiums are often high for young and inexperienced drivers, especially teenagers and those in their early 20s. Insurance companies consider younger drivers to be at higher risk due to their limited experience on the road, which leads to higher premiums. Rates tend to decrease as drivers gain more experience and reach their mid-to late-20s. However, the exact age at which insurance becomes less expensive can vary based on individual factors and the insurance provider’s policies. It’s essential for young drivers to maintain a clean driving record and explore discounts to help lower their insurance costs.

What Is the Cheapest Car Insurance for a 17-Year-Old in Ohio?

Erie Insurance has the lowest average rates for Ohio drivers under the age of 18, at $2,136 annually, or $178 monthly. A 17-year-old driver in Ohio can expect to pay an average of $3,172 annually in insurance costs, or $264 monthly. Here is a comparison table between Erie and other car insurance companies:

Cheapest Car Insurance in OhioEstimated Monthly CostEstimated Annual Cost
Erie Insurance$178$2,136
Auto-Owners Insurance$208$2,493
State Farm$217$2,603
Comparison table between Erie and other car insurance companies

Does Car Insurance Automatically Go Down at 25?

Yes, average rates are lower for drivers at 25 than they are for those aged 16 or 17, but higher than those at 40 or 50. In most cases, your premium will decrease at your first policy renewal after you turn 25.

Who Has the Cheapest Car Insurance for Teen Drivers?

According to research, the average annual cost of car insurance for a female teen driver who is 17 in the United States is $5,064, while for a male driver of the same age, it is $5,750.

The average annual premium for teenage girls is only $3,280 at State Farm. Geico’s sample rate for similarly aged guys is the lowest of any major insurer at $3,742 per year.

US service members and their families may save even more money by switching to USAA. The average annual premiums for teenage girls are $3,129 and for teenage boys, they are $3,364. Please be aware that USAA solely serves military personnel and their families.

On the opposite end of the scale, farmers’ annual premiums for a female driver aged 17 are $8,178, and for a male driver aged 17, they are $8,911.

Adding an adolescent driver to your car insurance policy is typically more cost-effective than getting them their own policy. Be prepared for price shock if you decide to insure your young driver on their own coverage.

Car Insurance Discounts for Teens

Teenage drivers might qualify for savings on auto insurance from most major providers. See whether you qualify for any of the following discounts for young drivers and teens. 

  • Driving education program discount. Insurers often offer premium discounts to students who maintain high standards of academic achievement. Rules vary by insurer, but typically, a motorist must be a full-time student with a B or 3.0 GPA.
  • The “away at school” rate. This discount may be available to young drivers who choose to forego car ownership in favor of on-campus housing. Eligibility requirements often include a minimum distance between the policyholder’s house and the student’s university of 100 miles.
  • Price reduction for driver’s education courses. Teen drivers who successfully complete a certified driver education program sometimes qualify for car insurance premium discounts. In addition to saving money in the short term, learning safe driving techniques will save you money in the long run because most insurance providers offer discounts to customers who maintain a spotless driving record for a set amount of time.
  • Cost savings for purchasing many cars. If you add a second car to your coverage, you could save money. 

Helpful Car Insurance Policies for Teens

Teens gain independence at license age, but many parents experience increased worry and stress as a result. Teenage drivers without adult supervision are more likely to make driving mistakes or get into crashes due to the wide variety of distractions they confront on the road.

While driving is the only method for a teen to obtain experience, some car insurance providers offer courses to teach safe driving and discourage risky behavior. Some insurance companies reward teens who finish their programs with premium reductions.

Programs that help young drivers include:

#1. SmartPath

Hanover Insurance has developed a mobile app that monitors teen drivers and assigns them a score based on characteristics like frequency of distractions while behind the wheel, severity of braking, speeding, and time of day. You can obtain a discount on car insurance and your teen can earn Amazon gift cards as they demonstrate safe driving behavior.

#2. TeenSmart

TeenSmart was created in collaboration with Allstate. Some of the leading behavioral and social issues that contribute to automobile accidents are addressed through the program’s use of interactive learning films, driving simulators, and parent and teen activities.

#3. Teen Safe Driver

A no-cost app from American Family Insurance tracks an adolescent driver’s potentially dangerous habits. After your kid has participated in the program for a year and driven 3,000 miles, American Family will give you a discount on your premium. Your teen will receive the discount upon renewal until they reach the age of 21.

#4. Steer Clear

There are five hours of content in this State Farm car insurance program, and it includes movies, puzzles, and real-world driving scenarios. Teens need to log at least 10 trips during their five hours of practice driving in order to receive a completion certificate. After finishing, send the certificate to your insurance company to receive a discount.

Does Car Insurance Policy for Teens Worth It?: Bottom Line

Car insurance coverage for teens can be essential and worth it for several reasons. Teens, especially new drivers, are statistically more likely to be involved in accidents due to their limited driving experience. Having insurance coverage helps protect them, other drivers, and your finances in case of an accident. It provides liability protection, covers medical expenses, and can help repair or replace vehicles.

However, the cost of insurance for teens can be high due to the increased risk. It’s essential to shop around, look for discounts, and encourage responsible driving habits to mitigate the costs. Ultimately, having car insurance coverage for teens is a necessary precaution to ensure financial protection in case of unforeseen events.

Best Cheap Insurance for Teens FAQs

What age is car insurance the lowest?

Accident rates and years behind the wheel are positively correlated with one another. High car insurance rates for teenage drivers begin to decrease at the age of 25. If you’re a safe driver in your 50s or 60s, you’ll get the lowest prices.

Does Progressive raise rates after 6 months?

Yes, rate increases occur every six months on average with Progressive. After the first six months of your policy, your Progressive premium is likely to increase if you make a claim or accumulate moving violations.

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