Car insurance companies charge higher premiums for new drivers because it has been discovered that young and inexperienced drivers under the age of 25 are more likely to be involved in an accident. However, not all companies boost their rates in the same way. Businessyield examined thousands of quotations to determine the cheapest solutions for various sorts of new drivers on average. We also gave recommendations for the best insurance companies for new drivers who want to balance pricing and service quality.
Your auto insurance estimate will be customized to you if you follow these tips. As a result, it’s critical for new drivers to shop around and compare insurance quotes from at least three companies to obtain the cheapest deal.
Best Auto Insurance for New Drivers Under the Age of 25
Allstate has the cheapest minimum-coverage car insurance premiums for new drivers under the age of 25. Insurance for new drivers costs an average of $2,743 per year. However, Allstate’s policy costs 56% less per year, at $1,205.
State Farm has the best rates for new drivers searching for full-coverage insurance, with a policy costing $3,308 per year or $276 per month. The national average for full-coverage insurance is nearly double that of State Farm, at $6,527 per year.
| Company | Minimum coverage | Full coverage |
| Allstate | $1,205 | $4,493 |
| State Farm | $1,547 | $3,308 |
| Geico | $1,572 | $3,550 |
| Nationwide | $3,363 | $8,298 |
| Farmers | $4,495 | $9,555 |
| USAA* | $1,390 | $3,512 |
Minimum-liability policies are usually the cheapest type of insurance since they provide the bare minimum of coverage that your state requires. Minimum-coverage auto insurance may appear to be the best option due to low premiums, but if you are involved in an accident, you may end yourself spending more out of pocket in the long run.
As a result, we advise buying a full-coverage auto insurance policy rather than a minimum-coverage policy.
Best Car Insurance for New Drivers Over the Age of 25
Allstate offers the cheapest minimum-coverage auto insurance for first-time drivers over the age of 25. The annual fee is $395, which is 62% less than the average of the estimates we obtained.
| Company | Minimum coverage | Full coverage |
| Allstate | $395 | $1,568 |
| State Farm | $589 | $1,398 |
| Geico | $950 | $2,011 |
| Nationwide | $1,058 | $2,852 |
| Farmers | $1,708 | $3,959 |
| USAA* | $712 | $1,896 |
State Farm has the most affordable prices for a full-coverage policy. New drivers pay $1,398 per year, making a State Farm policy $1,000 less expensive than the national average.
What is the Best Car Insurance for New Drivers on a Family Policy?
Sharing a policy with their parents or an older relative can result in much lower rates for young first-time drivers.
Allstate, Geico, and State Farm all have rates that are lower than the national average. Geico charges the least to add another car and driver to an existing policy, on average $1,419 per year.
Although State Farm charges a higher fee to add a second car and driver, its overall prices are lower than those of its competitors. A full-coverage policy with three vehicles and drivers from State Farm costs $2,201 per year on average – $813 less than the national average.
| Company | Parents only | With 16-year-old | With 18-year-old | With 21-year-old |
| State Farm | $1,038 | $3,139 | $2,644 | $1,982 |
| Allstate | $1,520 | $3,478 | $3,478 | $2,281 |
| Geico | $1,641 | $3,243 | $3,092 | $2,843 |
| Nationwide | $1,925 | $4,439 | $4,392 | $3,289 |
| Farmers | $2,392 | $5,020 | $4,761 | $5,527 |
| USAA* | $1,089 | $3,427 | $3,180 | $2,502 |
Adding a car and driver to a current full-coverage policy costs three to five times less than acquiring a separate policy.
Who Qualifies as a New Driver?
- Newly licensed adolescents
- Older drivers who have never held a driver’s license
- People who have a lapse in their driving or insurance coverage
- Foreign nationals and immigrants
New drivers should expect to spend an average of $1,582 per year for minimal coverage and $3,867 per year for full coverage. Car insurance premiums, on the other hand, vary widely depending on your age, where you live, and other criteria such as your credit score.
What Effect does Driving Experience Have on Car Insurance Rates?
Auto insurance companies base their premiums on a variety of factors, including driving experience. People with little to no driving history are substantially riskier to insure, thus they will have to pay higher premiums during their first few years of driving. However, as you spend more time behind the wheel, your insurance prices will continue to drop.
| Years licensed | Average annual premium | Percentage increase |
| 0 | $1,105 | 43% |
| 1 | $884 | 15% |
| 2 | $855 | 11% |
| 3 | $832 | 8% |
| 4 | $827 | 7% |
| 5 | $772 | 0% |
A minimum-coverage policy in Texas will cost $1,105 per year for a 30-year-old man with no driving experience. His rates drop by $131 after a year of driving. His charges are $333 lower after five years of having his license.
Because insurance companies only assess driving experience within the United States, immigrants and foreign nationals face higher premiums, even if they have foreign driving expertise.
What Effect Does Age have on Car Insurance Rates?
Age is one of the most important elements influencing new-driver rates. Teens, who have a higher risk tolerance, cause more accidents than middle-aged drivers on average. Some people, though, start driving later in life. Even if you’re a new but not inexperienced driver, you’ll pay greater rates than other drivers your age. You will, however, witness a smaller growth than your younger counterparts.
| Age | Minimum coverage | Full coverage |
| 16 | $3,097 | $7,229 |
| 17 | $3,021 | $7,079 |
| 18 | $3,107 | $7,450 |
| 21 | $1,747 | $4,351 |
| 25 | $1,198 | $2,984 |
In Texas, despite having the same level of driving experience,16-year-old drivers pay more than twice as much as a 25-year-old new driver for a full-coverage car insurance policy. Insurance rates for first-time drivers in their 30s, 40s, and 50s are much lower.
How to Find Cheap Car Insurance as a New Driver
Here are some techniques for finding cheap-cost car insurance as a new driver.
#1. Maintain the family policy
For drivers under the age of 25, it is less expensive to remain on your family policy rather than obtain an individual policy for auto insurance. You may need to switch insurance companies to get the best offer, but the savings can be substantial.
#2. Look around.
The Insurance Information Institute suggests receiving quotations from at least three different companies before deciding on one. Even if you’re just adding a teen to your policy, getting quotes from various companies is a good idea. Insurance companies understand that most individuals don’t think about their vehicle insurance very often, and your carrier may not be providing you with the best cost. Get quotes from your current insurer as well as at least two different companies.
#3. Take advantage of special offers.
Many insurance companies provide discounts, such as:
- Good student discounts: These are offered by a variety of insurance companies, albeit they may differ in how they define a good student. Expect to show evidence of at least a B average.
- Bundled discounts: When you combine your house and auto insurance with the same company, you may generally save 10-15%.
- Defensive driving discounts: Before selecting a school, check with your insurance carrier, as some keep a preapproved list of defensive driving courses. You can normally obtain an 8-10% discount for completing these lessons, but even if you don’t, these classes can provide you with the skills you need to help prevent accidents. Even if you don’t get a discount, this makes them a good purchase.
- Paid-in-full: You may be able to earn a 5-10% reduction if you pay your premium in whole rather than making no-deposit monthly installments.
- Low-mileage: If you don’t drive a lot, you might be eligible for a low-mileage discount. The amount of qualifying mileage varies by firm. Some companies consider driving fewer than 7,500 miles per year to be low-mileage, while others consider driving less than 15,000 miles to be eligible for a low-mileage discount.
- Green/hybrid car discount: If you drive a hybrid or electric vehicle, you can receive a 10% discount.
#4. Use a less expensive vehicle.
Some vehicles cost more to insure than others. Luxury cars are expensive to acquire and repair, and they will necessitate full coverage car insurance, which will cost you extra to insure. High-performance sports cars can increase your insurance premiums by hundreds of dollars every year, regardless of your age or where you reside. A more practical vehicle, such as a Toyota Camry, can be covered with liability car insurance, which will result in lower insurance prices.
#5. Increase your credit score.
Insurance companies use your credit score to calculate rates since people with higher credit scores have fewer accidents and cost insurance companies less money, according to Edmunds. However, three states, Massachusetts, California, and Hawaii, restrict insurers from using credit scores to establish premiums. Consumers in all other states should pay their payments on time and avoid using credit cards to improve their credit ratings and cut their insurance prices.
#6. Select lesser coverage amounts.
Except for New Hampshire, every state mandates a specified amount of liability insurance. It should look like this: 25/50/20.
- 25 ($25,000): The most your insurance company will pay for injuries per person in an at-fault collision.
- 50 ($50,000): The maximum amount paid by the insurance for injuries per vehicle.
- 20 ($20,000): Maximum property damage limit.
You’ll need the bare minimum of your state’s requirements, but you might desire more.
Liability insurance does not cover your car or medical expenditures. Furthermore, if you cause an accident and hit a car carrying four passengers, medical expenditures can soon exceed the state’s minimal liability insurance requirement. If you don’t have enough coverage, those four people can sue you, and you’ll have to pay their medical bills out of pocket, which can easily bankrupt many people. Yes, you can pay for the bare minimum of liability insurance, but there is a risk.
How much does insurance cost for a new driver?
On average, first-time drivers pay $1,582 per year for minimum-coverage insurance, while full-coverage policies cost $3,867 per year. Sharing a policy with parents or elder family members may allow young drivers to save money.
Is Insurance required for a new driver?
To drive legally, every state requires you to have auto insurance or proof of financial responsibility. Typically, you must acquire liability insurance, which covers accidents and property damage caused by you. You’ll also need to determine whether you want to tack on extra coverage, such as collision and comprehensive insurance.
What are the requirements for obtaining Car Insurance?
You will need to give your personal information (complete name, age, address, and license number) as well as vehicle information (make, model, VIN number, date of purchase, and mileage) and payment information to get auto insurance as a new driver (usually bank account or credit card).
How much does 16-year-old auto insurance cost?
A full coverage policy for a 16-year-old girl costs $813 per month, while a policy for a 16-year-old boy costs $876 per month. Insurance rates, on the other hand, range from $313 to $1,141 each month, which is why it’s critical to get estimates from multiple insurers in your area.
How much does auto insurance cost when you reach the age of 25?
On average, a 25-year-old driver should expect an 11% reduction in vehicle insurance premiums. However, rates drop further between the ages of 20 and 21 (17%) and 18 and 19 (16%).
How Much Will My Car Insurance Increase When I Add a Young Driver to My Policy?
Insurance for a young driver between the ages of 20 and 25 typically costs $2,176 and $2,758 annually. Of course, these are only averages; your actual rates will depend on a wide range of circumstances, not just your age. The cost of insuring a young driver also varies depending on whether they are covered under their parent’s policy or purchase their own. The minimum age to get insurance in the majority of states is 18. In most cases, a 20-year-old driver will pay significantly more for insurance if they get their own policy rather than remain on their parent’s policy as an additional driver.
Can I Save Money if I Add a Young Driver to My Auto Insurance Policy?
It is often more cost-effective to include a young driver on an existing auto insurance policy as opposed to acquiring new coverage specifically for the teen driver. If you have a young driver that you want to add to your policy, you may want to look for insurance providers that offer discounts for students or young drivers. These discounts may include savings for being a good student, being enrolled in school, having completed driver training, or having teen driver savings.
What Is Insurance Like for First-Time Drivers?
If you are a new driver, your auto insurance premiums will be higher than those of an experienced motorist. This is due to the fact that novice drivers face a greater risk of being involved in a collision than drivers who have had some experience behind the wheel for a number of years.
Where Can I Get Cheap Car Insurance for New Drivers Under 21?
According to WalletHub’s research, the auto insurance companies Travelers, USAA, and Progressive offer the most affordable policies to young drivers who are less than 21 years old. Due to the fact that drivers under the age of 21 are deemed to be high-risk, the cost of their auto insurance tends to be higher. This is due to the fact that younger drivers have a greater risk of getting into accidents and committing other driving offenses than older drivers with more experience.
What Is the Best Insurance Company for New Drivers?
Allstate is the best auto insurance for new drivers according to the rating system developed by MoneyGeek. This system takes into account both the price and quality of customer care. It is affordable for multiple age groups and provides coverages such as accident forgiveness and new car replacement that can help reduce the risk that inexperienced drivers provide to the insurance company.
At What Age Is Car Insurance Cheapest?
The expenses, on the whole, continue to go down with each passing year. When a motorist reaches the age of 50, they will be eligible for the best rates. However, beginning around age 60, individuals will notice a rise in their vehicle insurance premiums that is comparable to what they saw in their forties.
Best Insurance For Drivers FAQs
What kind of insurance is best for new car?
Because a new automobile is a substantial investment, it’s a good idea to purchase comprehensive collision coverage, which compensates for damage to the vehicle itself. You may be compelled to add certain coverages in your policy if you lease or buy your car with a loan.
Is it more expensive to insure a new or old car?
A new car may cost more to insure than an older one due to its value, repair costs, the danger of theft, and other variables. If you finance your new vehicle, your lender will almost certainly ask you to carry more insurance than the required minimum, which usually results in a larger monthly payment.
How do G2 drivers get insurance?
When you obtain your full G license, you will be eligible for an insurance discount. Make sure to inform your insurance provider of the good news so that you may get the full benefits of your new G license. If you are the parent of a G2 driver, you must add your child to your police record.
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