Anna Swartz is a managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.
Auto insurance for young adult and teen drivers is usually much higher than it is for older drivers. Our analysis found that drivers 25 years old and younger pay an average of $336 a month for a full-coverage auto insurance policy compared to $138 per month for those aged 30, 35, and 45.
But that doesn't mean it's impossible for teens and drivers to find affordable, high-quality car insurance.
How we chose the best insurance for teens and young adults
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Policygenius found the cost of auto insurance for young adults using rates from 130 companies. Our data experts analyzed quotes provided by Quadrant Information Services from every ZIP code in the country. Our average rates reflect the combined mean cost of full-coverage car insurance for drivers aged 16, 18, 21, and 25 with the following limits:
Bodily injury liability: 50/100
Property damage liability: $50,000
Uninsured/underinsured motorist: 50/100
Comprehensive: $500 deductible
Collision: $500 deductible
Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.
Best and cheapest car insurance companies for young drivers
Because the cost of insurance for young drivers is so expensive, the best companies for young adults are the ones that offer affordable rates.
Our analysis of rate data found Erie has the cheapest car insurance for teens and young drivers. On average, Erie's insurance rates for young adults are more than $1,754 cheaper per year than the average for the age group.
Many young adults can also get cheap car insurance from State Farm. While State Farm didn’t have the cheapest average rates overall, it is a national carrier — unlike Erie. Depending on where you live, COUNTRY Financial, USAA, and GEICO also have cheap car insurance for teens and young drivers — though not everyone is eligible for USAA coverage.
Compare rates and shop affordable car insurance today
While it's cheaper to add a teen or young adult to an existing policy than for them to get their own car insurance, this isn't an option for every teen driver. Out of some of the largest car insurance companies in the country, we found 16 where teenage and young adult drivers can get their own car insurance policy for less than $5,000 per year.
On average, car insurance for young adults costs $336 per month (or $4,034 each year).
Average cost of full-coverage car insurance for drivers ages 16, 18, 21, and 25 years old.
Our picks for the best auto insurance for young adults
There are many good car insurance companies for young drivers, but the best choice depends on each person’s individual needs. With this in mind, we picked a few of the best auto insurance companies for different types of young adults:
How we score: Policygenius’ ratings are determined by our editorial team. Our methodology takes multiple factors into account, including pricing, financial ratings, quality of customer service, and other product-specific features.
Erie has the cheapest car insurance for young adult drivers, but it's only available in DC, IL, IN, KY, MD, NY, NC, OH, PA, TN, VA, WV, and WI.
Overall, Erie is the best and cheapest car insurance for young adult drivers and teens. For drivers under 25 years old, Erie's rates are 43% cheaper than average. With Erie, auto insurance for young drivers costs $190 per month (or $2,281 per year). However, Erie is only offered in 13 states.
Young drivers can also get great discounts on car insurance with Erie including special discounts for drivers under 21 who:
Live with their parents
Complete an accredited training program
Are away at school without a car
Young adult drivers can also get different types of practical coverage from Erie. When you get a full-coverage policy, Erie includes roadside assistance of up to $75 per passenger, vet coverage for pets that are hurt while riding with you, and $75 lockout protection if you're not able to get into your car.
Best cheap auto insurance for young adults from a large company: State Farm
How we score: Policygenius’ ratings are determined by our editorial team. Our methodology takes multiple factors into account, including pricing, financial ratings, quality of customer service, and other product-specific features.
State Farm is the most likely to offer cheap car insurance for young drivers, with average rates that are $1,477 per year cheaper than average.
The cheapest auto insurance for young drivers from a major company comes from State Farm. On average, the cost of car insurance for young adults from State Farm is $213 per month — just $23 per month higher than Erie. But unlike Erie, State Farm auto insurance is available in nearly every state.
In addition to having the cheapest insurance for teens and young drivers, State Farm also has a few ways that teen drivers can lower their insurance premiums.
Full-time students can save up to 25% on their premiums if they maintain good grades. Young drivers can also save by taking a teen driver education course, or if they're away at school without a family car.
State Farm's Steer Clear program for drivers under 25 is another way for young drivers to save money on their car insurance. Qualifying drivers just need to complete a training course, lessons, and monitored driving sessions with State Farm.
Best cheap auto insurance for new teen drivers: COUNTRY Financial
COUNTRY Financial
COUNTRY’s low rates and special discounts make it the best car insurance for teens.
Besides being cheap for most young adults, COUNTRY also has car insurance for newly licensed teens that costs an average of $262 per month. Along with Erie, this makes COUNTRY Financial the cheapest company for new teen drivers, who often have a hard time finding cheap coverage due to their inexperience.
Besides low rates, COUNTRY’s discounts make it a good insurance company for teen drivers. Teens who are 16 or 17 years old can save up to 10% by answering 8 questions about safe driving on the company’s website.
The insurance company also offers teens discounts for completing a driving safety course and for maintaining at least a “B” grade point average in school. If you’re a teen who’s planning to attend college, COUNTRY also offers another discount for graduating.
Best cheap auto insurance for young adults in the military: USAA
USAA
If you're a young driver in the armed forces, or are a part of a military family, you could get cheap car insurance from USAA.
USAA is one of the best car insurance companies for young drivers. If you're a young driver who's in the military, the ROTC, or a part of a family with an active or reserve member of the armed forces, you're eligible for USAA's cheap rates. On average, young drivers pay $212 per month ($2,545 per year) for full coverage from USAA — 37% cheaper than average.
USAA is also known for outstanding customer service. According to J.D. Power's 2021 Claims Satisfaction Study, USAA ranks ahead of 18 of its competitors for customer satisfaction. [1]
Cheapest car insurance for teens and young adults by age
Erie has the cheapest car insurance for drivers under 25, but the most affordable company depends on the exact age of the driver.
While Erie is always among the five cheapest auto insurance companies for young drivers, it’s only the absolute cheapest for those who are 16 years old. As drivers age, Erie gets slightly more expensive than its competitors USAA and GEICO.
Cheapest auto insurance for 16-year-olds
Erie and COUNTRY Financial are the cheapest auto insurance companies for 16-year-olds. The cost of coverage from both companies is $262 per month. Since this age group is typically more inexperienced than older drivers, it’s more difficult to find cheap insurance as a 16-year-old.
With Erie and COUNTRY Financial, MAPFRE is the only other insurer to offer coverage for less than $300 per month.
Rank
Insurer
Monthly cost
T1
Erie
$262
T1
COUNTRY Financial
$262
3
MAPFRE
$267
4
State Farm
$319
5
Auto-Owners Insurance
$331
Cheapest auto insurance for 18-year-olds
COUNTRY Financial is the cheapest auto insurance for 18-year-olds. Since they’re two years older (and have two more years of experience driving) 18-year-olds typically have a much easier time finding affordable coverage from more than a couple of companies.
Rank
Insurer
Monthly cost
1
COUNTRY Financial
$209
2
Erie
$222
3
USAA
$230
4
State Farm
$252
5
GEICO
$254
Cheapest auto insurance for 21-year-olds
USAA has the cheapest rates for car insurance coverage for 21-year-olds. For young adults of this age group not affiliated with the military or a part of a military family, GEICO is the cheapest auto insurance.
Rank
Insurer
Monthly cost
1
USAA
$130
2
GEICO
$149
3
Erie
$163
4
COUNTRY Financial
$165
5
State Farm
$168
Cheapest auto insurance for 25-year-olds
USAA is also the cheapest car insurance for drivers who are 25-years-old. GEICO is a good insurance option for these young drivers if they aren’t veterans or in a military family — though it’s only a few dollars per month more expensive than Erie and State Farm.
Rank
Insurer
Monthly cost
1
USAA
$105
2
GEICO
$111
3
Erie
$113
4
State Farm
$114
5
American Family
$129
Cheapest car insurance for young adults in every state
While the average cost of car insurance for young adults from Erie is cheaper than other companies, the insurer has the absolute cheapest rates in just one place. USAA is the cheapest company for young drivers in 13 states. GEICO also has the cheapest coverage in 10 states.
Even if you live in a state where insurance is more expensive than average, it’s still possible to find cheap coverage as a young adult or teenage driver. Compare quotes in your area to find the cheapest car insurance — no matter your age.
Average cost of full-coverage car insurance for drivers ages 16, 18, 21, and 25 years old.
Why does car insurance cost more for young adults?
Even the cheapest car insurance for young adults is much more expensive than it is for older, more experienced drivers. The average cost of coverage for 16, 18, 21, and 25-year-old young drivers is $199 more each month than it is for drivers who are 30, 35, and 45.
Young adults, teens, and new drivers are more likely to get into an accident and file a claim than drivers who’ve had more experience on the road. Car insurance companies consider teen drivers a higher-risk group, and charge higher rates too.
Fortunately your rates go down as you gain experience behind the wheel, which means more opportunities to find cheap car insurance. As long as you avoid accidents, tickets, and other violations, your rates will get lower over time.
Average cost of auto insurance for young adults by state
The cost of car insurance varies depending on where you live. New and teenage drivers may pay substantially more for car insurance in some states than in others. In fact, we found the cost of coverage varies between states by as much as $539 per month ($6,472 per year).
Hawaii has the cheapest rates for auto insurance for young drivers of any state, because insurance companies there aren’t allowed to set car insurance rates according to age. Conversely, rates for young drivers are highest in Louisiana, at $648 a month.
State
Monthly cost
Annual cost
Alabama
$384
$4,607
Alaska
$265
$3,180
Arizona
$346
$4,155
Arkansas
$362
$4,343
California
$316
$3,787
Colorado
$358
$4,293
Connecticut
$441
$5,295
Delaware
$477
$5,721
District of Columbia
$398
$4,775
Florida
$551
$6,609
Georgia
$368
$4,413
Hawaii
$108
$1,299
Idaho
$254
$3,053
Illinois
$303
$3,639
Indiana
$230
$2,759
Iowa
$214
$2,564
Kansas
$304
$3,643
Kentucky
$445
$5,344
Louisiana
$648
$7,772
Maine
$237
$2,850
Maryland
$382
$4,590
Massachusetts
$367
$4,405
Michigan
$457
$5,480
Minnesota
$252
$3,029
Mississippi
$343
$4,110
Missouri
$319
$3,831
Montana
$397
$4,763
Nebraska
$312
$3,747
Nevada
$453
$5,430
New Hampshire
$275
$3,298
New Jersey
$522
$6,265
New Mexico
$293
$3,518
New York
$380
$4,558
North Carolina
$159
$1,912
North Dakota
$298
$3,580
Ohio
$222
$2,667
Oklahoma
$394
$4,732
Oregon
$300
$3,599
Pennsylvania
$353
$4,235
Rhode Island
$476
$5,713
South Carolina
$361
$4,330
South Dakota
$293
$3,510
Tennessee
$300
$3,601
Texas
$379
$4,543
Utah
$357
$4,278
Vermont
$228
$2,735
Virginia
$287
$3,450
Washington
$347
$4,162
West Virginia
$352
$4,227
Wisconsin
$241
$2,895
Wyoming
$285
$3,421
Average cost of full-coverage car insurance for drivers ages 16, 18, 21, and 25 years old.
Insurance discounts for young adults and teenage drivers
Although it can be difficult to find cheap auto insurance for young adults, it's possible to get lower insurance rates by qualifying for discounts. Every major insurance company offers discounts, and many of these cost-savings opportunities are specifically for teens, new drivers, and young adults.
Some of the most common car insurance discounts for young drivers include:
Good student discount: Lower your insurance costs by ranking near the top of your class, maintaining a high grade point average, earning a place on the honor roll, or by getting a high enough score on a standardized test as a homeschooled student.
Student away at school discount: Insurance companies offer discounts for students who live at least 100 miles away from home without a family car.
Driver's education discount: You could save on car insurance if you complete an eligible driving safety program. Your state DMV or an accredited group may run these driver’s ed or defensive driving courses.
Affiliation discounts: It's common for insurers to partner with certain universities, fraternities, sororities, on-campus organizations, and other student groups as a way to attract drivers. If you're a part of any eligible organization, you could save on the cost of coverage.
Usage-based discounts: These discounts can be very rewarding for young adult drivers. Your insurance company will offer lower rates if you complete a trial period where your driving is monitored via an app or a plug-in device. You may also have to take a class before you get cheaper car insurance.
How to get the lowest insurance rates for young drivers
The best way to find the cheapest auto insurance for young adults is by comparing the cost of coverage from multiple insurance companies in your area. This way, you can easily see the most affordable companies (along with the discounts each offers) and avoid paying more than you have to.
Other easy ways that you can get the best and cheapest auto insurance for young adult drivers is by:
Dropping some coverage: If you drive a used car that isn’t worth much anymore, it might be smart to drop collision and comprehensive coverage. These coverages are often among the most expensive parts of an insurance policy, and don’t make sense if your car wouldn’t cost much to replace.
Increasing your deductibles: On the other hand, if you drive a newer vehicle, consider raising your deductible amounts to get cheaper car insurance. A higher deductible (the amount that you pay on a comprehensive or collision claim), limits the amount of damage you can make a claim on, but it also makes your premiums much more affordable.
Keeping a clean driving record: While car insurance for young drivers is expensive, your rates will go down over time — as long as you avoid accidents, tickets, and other moving violations. If you don't, your rates may increase by thousands of dollars.
How car insurance protects teen drivers
After an accident, car insurance protects teens and other young drivers from having to pay for bodily injury or property damage themselves. Good car insurance is especially important for teens because of their inexperience driving and their low incomes.
According to the U.S. Census Bureau, 15.8 million or 60% of people younger than 25 years old with an income made less than $25,000 in 2020. [2] This means that compared to their older counterparts, young drivers are less likely to have the money to pay someone’s medical bills or replace a totaled car.
For this reason, we recommend getting as much car insurance as you can afford. If they can’t afford full-coverage insurance, teen drivers should at least get as much liability coverage as they can to avoid paying for expensive medical bills, lawsuits, and repairs for damaged property on their own.
The best car insurance for young drivers is Erie, which has the cheapest rates, along with great coverage, lots of discounts, and highly rated customer service. State Farm, Auto-Owners Insurance, and USAA are all great alternatives to Erie.
Where can you get cheap car insurance for a new driver?
Our analysis of rate data found that Erie has the cheapest car insurance for new drivers and other young adults. However, since there are only 13 states where Erie offers coverage, State Farm actually has the lowest rates for new drivers.
How will adding a young driver to my policy affect my premium?
No matter where you live, car insurance premiums get more expensive when young drivers are added to an existing policy. However, depending on the insurance company, you may qualify for a bundling discount after adding a second or third car to an existing insurance policy.
Why is car insurance so high for people under 25 years old?
People under 25 pay more for car insurance than older drivers because of their lack of time driving a car. Compared to older people, newer drivers are more likely to receive tickets, get into accidents, and make expensive claims.
References
Last updated on
May 11, 2022 |
Sources
Policygenius uses external sources, including government data, industry studies, and reputable news organizations to supplement proprietary marketplace data and internal expertise. Learn more about how we use and vet external sources as part of our
Anna Swartz is a managing editor and auto insurance expert at Policygenius, where she oversees our car insurance coverage. Previously, she was a senior staff writer at Mic.com, as well as an associate writer at The Dodo.
Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.
