Best Car Insurance For Under 25: Costs and Discounts

While age has no bearing on the type of car insurance you can obtain, it does affect the cost. You may need to do some research and take advantage of any available discounts to obtain the cheapest car insurance for drivers under the age of 25. If you need lower car insurance, this guide will show you which firms offer the cheapest insurance for young drivers. We evaluate car insurance rates by age and explore which discounts save the most money for drivers under the age of 25.

10 Best Car Insurance Companies for Young Drivers Under 25

The companies listed below provide the best insurance for young drivers in general, however, any of them may not be competitive in your state. Consult with multiple insurers to locate one that offers the best coverage at the lowest rate in your state.

#1. GEICO

Geico is one of the most cost-effective auto insurers on the market, with numerous discounts and programs for young drivers:

• Family Pricing Plan: The family pricing program allows young drivers within the same family to receive the same policy prices as experienced drivers. This plan allows young drivers to acquire a strong driving record while avoiding the high premiums associated with new drivers.
• Accident Forgiveness Initiative: This discount is only available to one family member on single insurance. It assists you in avoiding escalating premiums in the event of an at-fault accident.
• Good Driver Program: The Five-Year Accident-Free Good Driver Discount might save you up to 22% on your premium. Five years may seem like a long time, but if you start a policy when you’re 16, you’ll be eligible for the discount by the time you’re 21.
• Corporate/Eagle (Federal Government): This discount is offered to government employees as well as employees of participating firms. It has the potential to cut your premium by up to 12%.
• Military: If you are a member of the military, you can save up to 15% on your premiums.
• Good Student: Drivers between the ages of 16 and 24 who are full-time students with a “B” average or higher are eligible for this discount.

#2. Progressive

Progressive is well-known for offering some of the most affordable auto insurance rates available, including some of the most affordable auto insurance premiums for young adults. Pricing is primarily determined by the discounts available.

Safe Driver Discount.

This is one of the industry’s most aggressive discounts. If you haven’t had an at-fault accident or moving infraction in the last three years, you can save up to 31% on your rate. To qualify for this reduction, most other insurance providers need at least five years of no occurrences.

Other Progressive discounts include:

• Teen Driver Discount This reduction allows you to earn cheaper rates than you would ordinarily get when adding a teen driver to an existing policy.
• Discounts for online quotes and signup. You can save up to 7% on your auto insurance premiums if you shop for a quotation online, and another 9% if you sign policy documents online.
• Complete payment. Paying your premiums in full upfront will save you money. Progressive’s plans are billed in six-month increments, so making all six payments at once is simple.
• Excellent Student Discount. Get a 10% discount if you have a “B” GPA or higher.
• Program for capturing images. Get a discount based on how much you drive. Progressive claims that using the tool saves the typical driver $145 on their insurance costs.

#3. Branch

Branch is a newer auto insurance provider that promises to promote transparency and reduce prices for the majority of drivers, particularly young adults. It was founded in 2017. Branch allows clients to acquire insurance directly from the company, lowering prices.

This company also allows you to price out a policy in 30 seconds and has A+ financial strength ratings. Branch also has a revamped digital claims process that allows clients to file and handle claims online or via its mobile app, eliminating the need to call a claims center.

Discounts. Other than a refer-a-friend program and a Community Pledge program, Branch does not disclose any specific discounts you can qualify for. The Community Pledge program allows you to save money for each individual who guarantees you will not commit insurance fraud.

This supplier offers to help customers get the best deals on auto insurance without having to bundle it with homeowners’ or renters’ insurance. You can, however, shop around with Branch for prices on homeowners insurance, renters insurance, and umbrella insurance coverage.

Branch currently only offers insurance in the following states: Arizona, Colorado, Illinois, Indiana, Missouri, Ohio, Oklahoma, and Texas.

#4. Allstate

Allstate provides a variety of discounts to assist teens and young adults save money on auto insurance. For example, if you are under the age of 25 and a full-time student, you will receive a discount. Allstate, like most auto insurance, offers a discount if you have good grades.

It also provides a discount if you keep both your auto and renter’s insurance with the same insurer. There’s also a discount if you work for a company that offers specific discount programs (check with your company’s human resources department for further information). You may even be eligible for a discount if you are self-employed and work from home.

Allstate is still best recognized for its Accident Forgiveness program. It won’t help you lower your rate initially, but it will keep your premium from rising if you have an accident. Remember that Accident Forgiveness only applies to your first accident.

Allstate also offers a Safe Driving Bonus. If you add this benefit to your policy, you will get a check in the mail every six months if there is no accident. This is Allstate’s way of rewarding safe driving behaviors.

#5. Esurance

One of the benefits of Esurance is that it is consistently one of the most affordable auto insurance carriers in the business. This increases the likelihood that it will also provide the best insurance for young drivers.

The following discounts are available from Esurance:

• Excellent Student Discount. This discount is available to full-time students with a GPA of 3.0 (B) or higher. For adding more than one car to the policy, you must also qualify for the Multi-Car discount.
• No-Claim Discount. If you’ve been driving for at least five years with no at-fault accidents or moving offenses, you’re eligible for this discount. This saves drivers between 10% and 25%.
• Switch and Save Coupon If you have auto insurance with another company and switch to Esurance, you can save up to 5% on your premium. The discount applies only to your first two policy periods.
• Driver Safety Discount When you sign up for this program, the Drivesense mobile app tailors your discount to your driving patterns.

#5. Liberty Mutual Insurance Company

Liberty Mutual offers some intriguing discounts, some of which are ideal for young drivers looking for a reduction in their insurance prices.

Here are some discounts to inquire about:

• Away at School Savings. This discount may apply to your coverage if your child attends school at least 100 miles away from home.
• Discount on Driver Training. Complete a driver education course to receive a reduction on your auto insurance payments.
• Good Student Discount. This discount is available to full-time students who have a GPA of at least 3.0 (B) and are under the age of 25.
• Discounts are available for no accidents or violations. When accidents and violations are avoided over time, the entire family can save money on auto insurance premiums.
• Discount for military personnel. Active duty military personnel and their families can also save money on auto insurance.

#6. State Farm Insurance

State Farm’s Steer Clear program is designed exclusively for drivers under the age of 25. If you haven’t had any at-fault accidents or traffic offenses in the last three years, you may be eligible. This deal might save you up to 20% on your auto insurance. It won’t benefit you when you initially get an insurance, but it’s something to strive for.

State Farm also provides the following discounts:

• Discount for Driving Safely and Saving Money. This program calculates your savings using information from your smartphone or your vehicle’s OnStar or SYNC communication service.
• Discounted Defensive Driving Course. Customers who finish a defensive driving course may be eligible for a 10% to 15% discount.
• Discount for Students Away at School. You may be eligible for this discount if you are a student under the age of 25, living away from home while enrolled in school, and solely using your car at home.
• Excellent Student Discount. This reduction might reduce your auto insurance price by up to 25%.

#7. Nationwide

Nationwide has their own well-known Accident Forgiveness program. It is not accessible in all states, but it is one of the most important benefits available to juvenile drivers.

This is a significant advantage because teenage drivers are typically more likely than experienced drivers to be involved in accidents. Your rate will not increase if you have one accident (but only one!).

Nationwide provides its customers with additional discounts to help them save money on young driver insurance:

• Excellent Student Discount. Nationwide provides a Good Student Discount if you are a full-time student. If you maintain a grade point average of “B” or higher, you are eligible for the discount.
• Discount for Employer-Sponsored Plan. You can obtain a discount if your employer participates in a Nationwide discount scheme.
• Discount for several policies. You can also save money by combining your auto insurance with another policy, such as renter’s insurance.
• SmartRide Coupon. Nationwide additionally provides a discount if you meet the criteria for a safe driver as assessed by the usage of a plug-in device. It is a usage-based insurance product that allows you to receive a discount for driving safely.

And, as is often the case, by staying on your family’s auto insurance plan, you can get comparably less expensive coverage.

#8. USAA

USAA provides many discounts to young drivers from military households, including the following:

• Discount on Driver Training. If you are under the age of 21 and have completed a basic driver training course, you may be eligible for a discount.
• Discount for Safe Driving. Maintain a clean driving record for at least five years to lower your premiums.
• Excellent Student Discount. Young drivers who maintain good grades in school receive a discount.
• Discount for families. When you add an adolescent or young adult to an existing family policy, you can save money on auto insurance.

#9. Amica

Amica isn’t known for having the cheapest auto insurance for young folks. It does, however, offer numerous discounts that provide young drivers with significant savings on their auto insurance prices.

• Discount for being accident-free. If you have a claim-free experience, Amica will give you a discount. The reduction will apply if you haven’t had any claims in the last three years, except glass (think windshields) or towing.
• Excellent Student Discount. If you have a “B” average or higher and are between the ages of 15 and 25, you are eligible for this discount.
• Discount for Students Away at School. You can also save money if you go to school distant from home and simply drive rarely. To be eligible for this discount, you must be under the age of 25 and a full-time student.
• The Loyalty discounts offered by Amica are among the most intriguing. You can qualify for a lower rate under the Loyalty Discount if you have had a policy with the company for at least two years. The discount is larger the longer you stay with Amica. It also offers a Legacy Discount to drivers under the age of 30 whose parents have maintained an Amica auto insurance policy for at least the last five years.

Cheapest States for Car Insurance for Drivers Under 25

The average monthly cost of car insurance for drivers under the age of 25 is $285, according to Insurify’s own research. In some areas, however, teenage drivers can get substantially reduced monthly car insurance premiums.

When Does Car Insurance Get Cheaper For Young Drivers?

Young drivers will certainly see their car insurance go down after each year of driving on the road if they have a clean record — but how much it actually decreases by varies from year to year. An annual policy for 25-year-old costs $3,207 on average, or $267 per month. That’s only 11% less than the $3,597 ($300 per month) average for 24-year-olds.

While your auto insurance prices may decrease at 25, they will decrease the most when you turn 19 (16%) and 21 (17%).

Car insurance is more expensive for drivers under the age of 25 since they are statistically more likely to be involved in an accident than older drivers, making them riskier for insurance companies to insure. Young drivers’ risk to insurance lowers as they age, and insurers reflect this decline through lower premiums.

When Does Car Insurance Become Cheaper for Male than Female Drivers Under 25?

Car insurance does decrease for drivers beyond the age of 25, but not as much as it does for other ages. Unless you live in a jurisdiction where insurers are not allowed to consider gender in insurance prices, one important change occurs at the age of 25; the difference between what male and female drivers pay for car insurance. At the age of 25, males’ car insurance drops by 12%, while females’ drops by 9%.

On average, car insurance for a 25-year-old male costs 2.5% higher than car insurance for a 25-year-old female. That’s a lot smaller difference than the difference between what 18-year-old males and females pay (11%) or even what 23-year-old males and females pay (6.7%).

Statistics explain why car insurance for young male drivers is so expensive. According to research from the American Automobile Association’s Foundation for Traffic Safety, men spend more time behind the wheel than women. Furthermore, the National Highway Traffic Safety Administration reports that the gender distribution of fatal crashes among drivers aged 21 to 25 differs dramatically: 76% male versus 24% female. To account for this disparity in risk, insurers charge male drivers more.

However, in other states, insurers are prohibited from including gender in their pricing calculations. Among these states are:

• California
• Hawaii
• Massachusetts
• Michigan (in certain areas)
• Montana
• North Carolina (NC)
• Pennsylvania

However, regardless of where you reside, car insurance costs for male drivers fall so dramatically that by the age of 32, men pay significantly less for car insurance than women.

Car Insurance Savings Tips

Finding the cheapest car insurance when you’re under the age of 25 may seem unattainable. Use these suggestions to save money on insurance and lower your costs.

#1. Compare Car Insurance Quotes

Shopping around for car insurance is the best method to save money. Many insurers will charge an additional premium if you are under the age of 25. Getting quotations from multiple companies is a good idea. Insurify, a free online quote comparison tool, makes this process simple.

#2. Maintain Your Parent’s Insurance Policy

Because most of us want to keep our prices as low as possible, staying on our parents’ policy until we can afford our own is an easy approach to saving money on car insurance. To make this work, you must have the same permanent address as your parents. Staying on a parent’s car insurance coverage allows young drivers to keep their costs low.

#3. Drive an Older, Safer Car

Convertibles and showy sports cars are appealing but don’t buy them. Instead, drive an older, safer car that is far less expensive to insure.

#4. Choose a High Deductible Plan

A larger deductible policy may be your best bet if you’re seeking cheap car insurance. In general, the bigger the deductible, the lower the premium.

#5. Maintain a Clean Driving Record

No of your age, maintaining good driving habits and a clean driving record will save you money on your car insurance coverage. When you accumulate points on your license for careless driving (e.g., speeding, running red lights), auto insurers view you as a higher risk and charge you accordingly. It isn’t worth it. Being a good driver will help you save money.

#6. Keep a Good Credit Score

Many insurers look at your credit score to determine your overall dependability. A low credit score can result in higher car insurance premiums. Work on improving your credit score to reduce your rates and boost your peace of mind. Lower average rates favor drivers with good credit.

Why Isn’t My Car Insurance Going Down Now That I’m 25?

Rates may not always decrease when you reach the age of 25. Other characteristics can have a greater impact on 25-year-old car insurance prices than gender. Here are some of the reasons why your rates may not have been completed once you turned 25:

• Experience: If you’re a new driver at 25 years old (or older) and getting car insurance for the first time, you’ll spend significantly more than a driver who was licensed at 16.
• Driving record: If you’ve been in an accident or earned a speeding ticket, insurers will regard you as a higher-risk driver and charge you accordingly.
• Credit history: Unless you live in one of the few areas where it is unlawful to include credit into rates, a low credit score may result in higher car insurance prices.
• ZIP code: If you move to an area with a greater rate of theft and vandalism, insurers will charge you a higher premium to account for the increased risk of damage or theft.

Before selecting a policy, make sure to compare cheap car insurance quotes. Every insurance company calculates prices differently, and some emphasize some criteria more heavily than others. To receive the best cost, we recommend reevaluating your insurer every year.

Why Is Car Insurance so Expensive for Drivers Under 25?

Due to the fact that every insurance provider has their very own proprietary rating system, policy premiums for the same driver can vary by hundreds of dollars or even more on an annual basis. However, while deciding your rates, they all take into account some of the same fundamental aspects, such as your age, where you live, and your past record behind the wheel.

When Do Car Insurance Rates Go Down?

After the age of 25, drivers typically begin to observe a decline in their rates. In general, rates go down as people get older, although this effect is limited to a certain degree. Once you reach the age of 65, you may see a rise in your insurance premiums due to the increased likelihood of being involved in an accident.

How Much Does Car Insurance Cost for a 25-Year-Old Driver?

The cost of automobile insurance for a motorist aged 25 years old is approximately $306 per month on average. Insurance companies view younger drivers as a bigger risk, so they charge higher premiums to those drivers up to the age of 25 in most cases. Drivers under the age of 25 have less experience on the road and are more likely to get into accidents, both of which lead to an increase in the number of insurance claims filed.

Your ability to drive safely, your credit score and the length of time that has passed since your last accident can all play a role in determining the cost of your auto insurance policy.

What Is the Cost Difference for Males and Females Under 25?

Men under 25 years old pay, on average, $45 more per month than their female counterparts under 25 years old. Due to the fact that women are involved in fewer accidents than males on average, insurance companies view male drivers as posing a greater danger.

What Is the Cheapest Car Insurance for Drivers Under 25?

Farmers and Travelers are the two auto insurance providers that offer the most affordable policies to young drivers under the age of 25. Both of these organizations offer rates that are significantly cheaper than the average monthly payment of $403 that young drivers make. Both companies also provide young drivers and students with a variety of discounts on their products and services.

How Does Age Affect Car Insurance Rates?

Age is one of the most significant contributors to the steep increase in rates for new drivers. On average, teenage drivers, who have a greater propensity for taking risks, are to blame for more accidents than middle-aged drivers. However, there are some people who don’t start driving until much later in life. Even if you are a new driver who is not a teenager, you might expect to pay greater premiums than other people your age who are also new drivers. On the other hand, the growth will not be as significant for you as it is for younger people.

Is Cheap Full Coverage Insurance Available for Drivers Under 25?

Lenders almost always insist that car loan borrowers carry full coverage insurance, so policyholders who are still making payments on their vehicles should do the same. You can find more reasonable rates for these plans, despite their apparent high cost.

Your driving record and the make and model of your vehicle are just two factors among many that can affect your insurance premium. Avoiding accidents and buying a low-risk vehicle can save a lot of money over time on car insurance.

Young drivers can also qualify for discounts for doing things like bundling their insurance, being good students, and living away from college. When purchasing a policy, make sure that any applicable discounts have been applied.

Car Insurance For Under 25 FAQs

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References

• Valuepenguin
• AllState
• MoneyGeek
• Insurify