Cheapest Car Insurance for Drivers Under 25 (2023)

Drivers under 25 often pay the highest rates for car insurance. Statistically, young drivers are more likely to be involved in serious crashes than any other age group.^[1]

Younger drivers still have options for cheaper car insurance since each insurance company has different rates and standards for weighing risks. To help narrow down your search, Insurify analyzed quotes for younger drivers to find the cheapest car insurance for drivers younger than 25.

Cheap car insurance quotes for drivers under 25

The average monthly cost of car insurance for drivers under 25 is $403, according to Insurify’s proprietary database of more than 70 million quotes. However, several companies, such as Farmers, Travelers, State Farm, and regional insurer Erie, offer quotes much lower than that. The table below shows monthly averages for companies offering the cheapest car insurance to drivers under 25.

Learn More: Car Insurance for Young Professionals

The best car insurance companies for drivers under 25

Younger drivers naturally have less driving experience, and this gives them a higher risk of being involved in an accident. As a result, insurers tend to charge higher premiums to younger drivers for both liability and comprehensive coverage.^[2]

While it may seem like companies are penalizing you for your age, insurance premiums are mainly based on the level of risk insurers take on by insuring you and on your likelihood of filing a claim. As a result, if you pose a higher risk, you’ll pay a higher rate.

Insurers also consider other factors like credit, the type of vehicle you drive, where you live, past driving history, and your claims history.^[2] This means you can still save money on insurance premiums as a young driver. Check out the best car insurance companies for drivers under 25, according to Insurify.

Farmers

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Farmers

Farmers is Insurify’s top recommendation for the cheapest car insurance for drivers under 25. With premiums of $180 per month on average, young drivers don’t have to pay significantly more than drivers with more experience. Additionally, Farmers offers many discounts that young drivers could be eligible for, such as:

• A good student discount (for drivers under 25 who maintain a B average or higher)

• A multiple vehicle discount

• Bundling auto and renters insurance

• Alternative fuel vehicle discount

Owners who drive hybrids and other alternative fuel vehicles may save 5% on all major coverages.

Keep Reading: Farmers Car Insurance Review

Travelers

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Travelers

Travelers offers a wide range of car insurance options and has local independent agents to help you determine the right coverage limits for your needs. This insurance company offers discounts to safe drivers who haven’t had an accident in three to five years, along with students who maintain a B average or better.

Travelers also offers optional added coverage, like roadside assistance and coverage for rental car fees if a covered accident leaves you without a car during repairs. Accidents do happen, and instead of raising your premium if you file a claim, Travelers has an accident forgiveness program where the company forgives one accident within a specified period.

Learn More: Travelers Car Insurance Review

State Farm

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State Farm

State Farm offers many car insurance coverage options and saves students up to 25% on premiums when they get good grades; just submit your most recent report card as proof. You can lock in these savings even after graduating college, until you’re 25 years old. As a homeschooler, you might also qualify for a good student discount if you submit your national standardized test scores.

Local State Farm agents can help you personalize your coverage and maximize benefits as a young driver. State Farm offers discounts for:

• Safe drivers who successfully complete State Farm’s Steer Clear program requirements

• Teens and young adults who complete their driver training program

• Bundling insurance

To enroll in the Steer Clear program, you must be under 25 years old, have a valid driver’s license, and have no at-fault accidents or moving violations in the past three years. The program requires you to complete a five-module video course and practice safe driving on the road.

Learn More: State Farm Car Insurance Review

Safeco

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Safeco

Safeco Insurance is a part of Liberty Mutual Insurance and sells policies exclusively through independent agents. This insurance company offers a diminishing deductible, which means your deductible amount will decrease each year that you don’t file an insurance claim — to a maximum of $500.

If you don’t make any claims for at least six months, Safeco will also automatically mail you a check for up to 5% of your policy premium. Even if you do need to file a claim after an accident, Safeco car insurance policies have an accident forgiveness feature, so you may not see premiums increase if you remain accident-free for the next few years.

Keep Reading: Safeco Car Insurance Review

USAA

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USAA

Known as the United Services Automobile Association, USAA provides financial services for current and former military members, including their families. U.S. News and World Report named USAA the cheapest car insurance company in the country for several years, and it’s an excellent option for younger drivers who qualify.

USAA provides discounts on car maintenance, travel, and online shopping while allowing you to get discounted premiums for being a safe driver. Other discounts include:

• Student driver with good grades

• Bundling insurance services

• Driving a new vehicle with an anti-theft device

• Storing your vehicle when deployed

Check Out: USAA Car Insurance Review

How much does car insurance cost for drivers under 25?

Even though drivers under 25 can pay higher car insurance premiums than older drivers, rates still vary depending on your specific age. A driver who’s 16 may not get the same rate as a driver who’s 23. In fact, your monthly car insurance premiums could fluctuate by $50 to $60 or more each year leading up to age 25.

Age 18 seems to be the most expensive year to pay for car insurance, but discounts from your insurance company could help lower costs. The following table shows average car insurance rates by age.

The best auto insurance discounts for drivers under 25

Paying for car insurance as a driver under 25 can be expensive, even if you can find lower quotes from an insurance company. Many insurers understand this and try to offer discounts to help you save a little more money on your monthly payments.

Here are some common car insurance discounts for drivers under 25 and how to get them.

Tips for getting cheaper car insurance

When you’re under 25, finding cheap car insurance that fits your budget isn’t impossible. Use these tips to help you cut your premiums as a young driver.

Shop around for car insurance

Shopping around for car insurance helps you understand all your options and compare rates. No two insurance companies are the same, and some insurers offer better rates to younger drivers despite their age and lack of experience on the road. The easiest way to shop around for car insurance is by comparing rates and features online from top insurers all in one place.

Stay on your parents’ policy

When you started driving, your parents likely added you to their existing policy. It’s typically cheaper to add another driver — even a teen driver — to an existing policy than it is to initiate a new, solo one for the new driver. This is especially true if your parents have good driving records and credit history.

Remaining on their policy as a young adult could also help your parents score a multi-car discount. You can work out with your parents what portion of the premium you’ll be responsible for paying.

Choose a higher deductible

If you can choose your deductible, consider setting a higher deductible to save on your premium.^[2] But understand that this means you’ll need to pay more out of pocket if you do need to file a claim.

However, you’ll save money on premiums long-term if you don’t get into any accidents, so it may be a worthwhile risk. During the sign-up process, ask your insurance company or agent how much your premium payment would change if you chose a $1,000 deductible vs. $500, for example.

Learn More: What to Do If You Can’t Pay Your Car Insurance Deductible

Drive safely and take a defensive driver class

Defensive driver classes help you learn how to drive safely to avoid accidents and follow the law. These classes are beneficial, and many insurers give you a discount on car insurance if you provide proof that you completed it.

In addition to the discount, the fact that you’re a safe driver will lower your risk and help you get more savings in the future. Plus, what you learn in the class could help you avoid accidents that typically increase your insurance premium.

Consider driving an older but reliable car

Car insurance rates also depend on the type of car you drive. A newer car or a high-performance car like a sports car will cost more to insure, especially if the type of vehicle is commonly involved in accidents or theft. When a car costs more to repair or replace, insurers charge a higher premium, so consider driving an older but reliable car.^[2]

Maintain a good credit score

Insurance companies look at your personal credit score and your insurance score when you apply for car insurance. Your insurance score is based, in part, on your credit score, and it helps predict the likelihood you’ll file an insurance claim and the cost of the claim. Meanwhile, your personal credit score measures how well you pay bills on time and manage your money.

Maintain a good credit score by paying bills on time so they don’t go to collections, paying down debts, and limiting your hard inquiries.^[3]

Check Out: Car Insurance Rates by Credit Tier

Take advantage of discounts

Save 10% to 25% on your car insurance premiums with various discounts. Most insurers have discounts for students with good grades, bundling different insurance policies, driving a vehicle with anti-theft protection, and more.

States with the cheapest car insurance for young drivers

The state you live in affects your car insurance rates for a number of reasons, including the differences in medical care and car repairs costs by location. Some states also have different risks from others, such as extreme weather conditions or population density, that are unique to a specific area.^[4]

Using Insurify’s proprietary database of more than 70 million insurance quotes, here are some of the states with the cheapest car insurance for young drivers.

How to find cheap car insurance as a driver under 25

To find cheap car insurance in your teens and early 20s, first, consider how much coverage you need. Each state has minimum coverage requirements for liability insurance, which will cover medical costs and vehicle damages for the other driver if you hit their car.

However, you may want to consider collision or comprehensive insurance to cover your vehicle. Consider the value of your car as well when deciding whether to purchase full coverage and the coverage amount you’d need. Keep in mind that if you financed or leased your car, your lender or leasing company will require you to carry full coverage.

If your car is older, it may make more sense to make repairs or replace it out of pocket rather than pay for full coverage and file an insurance claim.

Also, consider insurance companies that offer discounts to drivers under 25, whether it’s a student discount or a defensive driver course discount.

Comparing auto insurance quotes early on ensures you’ll get the cheapest car insurance since you can see what each insurer offers. Use an insurance-comparison tool, which often requires you to fill out just one form to receive multiple quotes. Comparison tools do all the work and research for you, and you may find insurance options you didn’t know were available before.

Car insurance for drivers under 25 FAQs