Best car insurance for new drivers

The best car insurance for a new driver can vary, but our data shows that Erie has the lowest rates for 16- and 18-year-old drivers while USAA and GEICO have the lowest rates for 21-year-old drivers.

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By

Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

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Buying car insurance for a new driver can be a shocking experience. Some companies increase your rates by thousands of dollars a year to add a newly-licensed driver to your policy, which can be overwhelming, but insuring a new driver doesn’t have to leave you bankrupt.

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There are several companies that charge reasonable rates for new drivers, which means you don’t have to pay more for your insurance than you did for your car. And there are other tips for new drivers looking for cheap car insurance, like earning discounts and driving safely.

Key takeaways

  • Of the biggest car insurance companies, Erie has the lowest rates for 16-year-old drivers at $3,145 and 18-year-old drivers at $2,663.

  • Farmers has the highest rates for 16-year-old drivers at $10,488 per year.

  • While car insurance can be more expensive for a new driver, there are many things you can do to save money on your car insurance, including comparing insurance companies and keeping your driving record clean.

Cheapest car insurance companies for new drivers under 21

The chart below shows the average rates at 10 top car insurance companies for new drivers under the age of 21:

Company161821
Erie$3,145$2,663$1,960
State Farm$3,822$3,022$2,019
American Family$4,522$3,190$2,152
GEICO$4,572$3,046$1,783
USAA$4,603$2,759$1,562
Nationwide$5,605$4,878$2,418
Travelers$7,215$4,087$2,296
Allstate$8,501$5,465$2,940
Progressive$9,910$7,540$2,881
Farmers$10,488$7,919$2,781

Erie has the lowest rates for 16-year-old drivers at $3,145 and 18-year-old drivers at $2,663, while 21-year-old drivers will have the lowest rates with USAA at $1,562 and GEICO at $1,783.

Finding the best car insurance for new drivers 

Figuring out which car insurance is best for a new driver will depend on a number of factors, including:

  • Single or family coverage: Adding a new driver onto a family policy is almost always the cheapest option. Not only does this allow a new driver to take advantage of a multi-car discount, it also allows them to benefit from other discounts that are already part of the family coverage, like bundling discounts and group discounts.

  • Where you live: Insurance rates vary state-to-state, sometimes significantly, which means the cheapest coverage in one state may not be the most affordable option in another. There are many insurance companies that don’t offer national coverage, which means the coverage options are not necessarily the same from state to state.

  • Your age: A new driver at age 16 is not necessarily the same risk as a new driver who is 35. How old you are when you get your license can sometimes impact how much you’ll pay as a new driver.

  • Your gender: Each company thinks about gender differently, but most companies offer dramatically lower rates for 16-year-old female drivers than they do for 16-year-old male drivers, sometimes saving hundreds or even thousands of dollars each year. Other companies don’t consider gender when setting rates, so if this is a concern for you it can be helpful to shop around.

How does age affect car insurance rates?

Younger drivers usually have less experience behind the wheel than older drivers, which is a big reason why rates are more expensive for drivers in their teens and early twenties. In some cases, younger drivers are charged thousands of dollars more for car insurance, but this can vary significantly from one company to another.

For example, Farmers charges an average of $2,781 for a 21-year-old driver, which makes them competitive with other major insurance companies. However, at $10,488 per year, their rates for 16-year-old drivers are extraordinarily high. This means Farmers has a $7,707 difference in price between 16 and 21-year-old drivers. In comparison, Erie charges $3,145 for 16-year-old drivers and $1,960 for 21-year-old drivers, which is only a $1,185 difference.

AgeAverage annual premium
16$6,779
18$4,931
21$2,708
25$1,929
30$1,705
35$1,654

Is car insurance expensive for new drivers?

Most of the time, car insurance rates for new drivers are much more expensive than rates for drivers with more experience. However, there are some companies that don’t consider age or experience when setting your rates, which means you can potentially save a significant amount of money by comparing quotes.

How to save money on car insurance as a new driver

While car insurance can be more expensive for a new driver, there are many things you can do to save money on your car insurance, like:

  1. Compare car insurance companies: As you can see, rates can be wildly different depending on which company you choose, so you will want to compare insurance companies to make sure you are getting the lowest rate.

  2. Earn good student discounts: Drivers under the age of 25 can take advantage of a good student discount, which can save you upwards of 20% on your car insurance if you maintain a specific GPA.

  3. Take a defensive driving course: A defensive driving class or a safe driving course can help you avoid accidents and moving violations, but many companies offer discounts for drivers who take the course. 

  4. Keep your driving record clean: Avoiding accidents, tickets, and other traffic violations is the best way to keep your insurance rates from going up. A single accident can increase your insurance costs, sometimes by $1,000 or more each year.

  5. Maintain a good credit rating: In many states, insurance companies can use your credit rating when setting your premiums, which means having a good credit score can help you avoid paying higher rates.

Frequently asked questions

What influences the price of insurance?

There are many things that can influence the price of car insurance, including your age, gender, ZIP code, driving history, and what kind of car you drive. Each company has an internal system for determining their rates, however, so it is important to compare rates to make sure you are getting the cheapest car insurance available to you.

How much does it cost to insure a new driver?

Depending on the age of the new driver and which company they choose, a new driver could pay anywhere from $1,251 to more than $10,000 a year for car insurance.

How much does car insurance drop when you turn 25?

This varies from company-to-company, but according to our data it would not be unreasonable to see a drop in premium somewhere between $200-$500 between the ages of 21 and 25. You may also see a big drop in price between 18 and 21 as well.

What do you need to get car insurance?

To get car insurance you will need your personal information, like your name, address, and the make and model of your car. You will also need to provide some specifics, like your driver’s license number and the VIN on your car, so make sure you have your license and your vehicle registration paperwork handy when you speak with an agent.

Methodology

Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C. 

For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by the state or insurer.

Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles per year.

Rates for driving violations and “poor” credit were determined using average rates for a single male 30-year-old driver with a credit score under 578.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.