10 Cheap Car Insurance Plans for Young Adults

Everything You Want to Know

car insurance ratesLearning to drive is something every teen looks forward to. They’re excited about having a little freedom, but parents are worried about their teen’s safety—and their car insurance rates. We’re here to help! We think driving can be fun as long as you learn the basics and act responsibly.

What Factors Affect the Cost of Car Insurance for Young Drivers?

Teens have little to no experience behind the wheel, so rates can be much more expensive than for the average driver. Other factors that can impact the cost of auto insurance for teens are the amount of coverage you buy, the kind of car you drive, and how much you drive each year. Moving violations or accidents on your driving record can also increase rates.

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Install anti-theft devices

You may save when you install an anti-theft device in the vehicle. Your possible discount varies based on the type of device installed and the state in which the vehicle is garaged.

Tips to save money on car insurance for new drivers

There’s no one surefire way to find the best price for auto insurance, but there are a few things you can do to get a lower car insurance premium. We recommend using the following strategies if you’re purchasing car insurance for new drivers.

Compare companies

No two insurance companies will give you the same price. Taking time to compare car insurance quotes will give you a baseline idea of what you can expect to pay when adding someone to an existing policy — or how much you could save by switching providers.

When you’re deciding between two companies, it may also help to read comparisons like our Allstate vs. Progressive review or State Farm vs. Geico review. These break down each company’s discount offerings and customer reviews side by side.

Look for discounts

Several car insurance companies offer discounts for young drivers and students, but you can save money through other means too. Bundling policies like homeowners insurance with your auto coverage can lower your premium, so check to see if your insurer offers a multi-policy discount.

Here are some common discounts offered by insurance providers:

  • Safe driver discount
  • Multi-policy discount 
  • Multi-vehicle discount
  • Military discount
  • New vehicle discount
  • Vehicle safety feature discount

Adjust your coverage

If you’re looking to save and have a new driver on the road, adjusting your current auto policy might give you a better rate. Opting for a higher deductible usually leads to lower premiums, but it does mean paying more up front if you file an insurance claim.

Another option is dropping coverage you don’t need. If one of your cars is older and you own it outright, you can likely stop paying for collision insurance and comprehensive coverage. In most states, you’ll still have to pay for liability insurance if you decide to drop the rest of your full coverage policy.

What Are the Different Types of Car Insurance for Teens?

Although there are some exceptions, most car insurance companies offer:

  • Bodily Injury and Property Damage Liability to cover the other party's medical care and damages when you are the at-fault driver
  • Collision Coverage to cover your own vehicle’s damage regardless of fault
  • Comprehensive Coverage to pay for non-accident related damages
  • Personal Injury Protection/Medical Payments to cover your medical expenses in case of an accident
  • Uninsured Motorist Coverage to cover your damages and medical expenses when the at-fault driver doesn’t have accurate coverage
  • Guaranteed Asset Protection (GAP) Coverage to cover the gap between your car's lease or loan and the determined value in the case of a total loss

If I add a teen to my car insurance, how does coverage work?

If you add your teen driver to your car insurance policy, they’ll benefit from the same protection that you do. All covered drivers have access to all cars listed on the policy, and the liability limits are the same for all drivers on the policy. Since teen drivers pose a greater risk of accidents, you may want to increase your liability limits on the policy, especially if your current limits aren’t covering your entire net worth. Learn more about liability coverage.

All extra coverages on the policy will also apply to your teen, including roadside assistance, , rental car reimbursement, and disappearing deductibles.

Why Car Insurance Is More Expensive for Young Drivers

The main reason young people pay the highest premiums for auto insurance is their general lack of driving experience. Driving requires a reflexive response and an undeniable level of intuition. As an inexperienced driver, young people haven’t developed those qualities.

Also, all insurance companies price their policies based on the risk the insured presents for the company. From an insurance company standpoint, there’s a lack of measurable driving history.

There’s no way to adequately assess the risk for someone who has never driven. Even for the young person who’s driven for just one or two years, the track record is considered insufficient to make a determination. That leads to higher rates lasting for several years.

Additional Factors that Affect Young Driver Car Insurance Rates

Unfortunately, it also has to do with the driving habits of young adults themselves. They’re more likely to engage in distractions while driving. These can include talking on cell phones, texting, and adjusting entertainment media. 

Interestingly, a Liberty Mutual survey discovered that teens are likely to follow the poor driving habits they see in their parents, heightening the risk of an accident on the road and impacting their coverage.

Parents who might have decades of driving experience are being watched by their less experienced teens. Young drivers then adopt the same dangerous driving habits like speeding, texting at stoplights, and failing to follow other traffic laws.

Safe driving is key to getting and maintaining affordable car insurance, period, but especially for young drivers.

How do you save money on auto insurance for teens?

There are ways to cut down on insurance premium policy costs. For instance, being a safe driver and using more efficient vehicles (such as Honda Civics, Toyota Priuses and Nissan Rogues) tends to cut costs, even for teen drivers, according to Giusti. There are also discounts based on how often you use your car: “Some companies offer discounts to motorists who drive less than the average number of miles per year,” says Janet Ruiz, director of strategic communication at the Insurance Information Institute.

Teens may also qualify for “good student” discounts, or discounts based on learning safe driving habits from a defensive driving course or graduated driver licensing programs.

You may also be able to save money if the younger driver on your policy isn’t using their car because they’re away at college. “If there is a young driver on your policy who is … away at college without a car you may also qualify for a lower rate,” according to Ruiz. Every insurance carrier offers different discounts depending on your coverage option and other factors, so it pays to check which ones apply to you before signing up.

Practice safe driving

One of the most reliable ways to keep insurance costs low is to avoid accidents. Learn about the risks teen drivers face and get tips for how to prevent them. Nationwide’s teen driving resource center offers practical information about teen decision making, distracted driving, the role of parents in teen driving and more.

Getting the right coverage that best fits your needs is important for saving money on your teen’s car insurance policy. Learn more about Nationwide’s auto insurance coverage types today.

Frequently asked questions

Country Financial , a regional insurer, offers the cheapest overall rates we found for teen drivers, while State Farm had the lowest rates for national insurers. Auto-Owners had the lowest rates for parents with teens on their policies.

Teen drivers with their own policy pay an average of $4,917 per year. However, the increased cost of adding a teen to a parent’s plan is only $1,809 per year.

Insurers often provide discounts to teen drivers for getting good grades , taking an additional training course beyond basic driver’s education and being away at school, where you won’t be using your parents’ car much. Going on a parent’s or guardian’s policy can lower rates by more than 60%.

Car insurance for teenagers

It can be exciting for a teen to start driving on their own for the first time, but the cost of car insurance for new drivers is typically high. As mentioned, age is one of the main factors insurance companies consider when calculating prices.

Part of the reason insurance companies hike rates for younger drivers is the increased likelihood of an accident. Car crashes are the second-highest leading cause of death for teenagers in the U.S., according to the Centers for Disease Control and Prevention. Additional reporting from the Insurance Institute for Highway Safety shows that nearly two out of every three teenagers killed in crashes in 2019 were males.

How to get cheap car insurance for new drivers

Usually, the best way for young drivers to get cheap car insurance is to stay on their parents’ policies. Car insurance companies typically offer families several discounts to save money on insurance coverage, including:

  • Safe driving discounts
  • Good student discounts (must have B average grades or higher)
  • College student and student-away-at-school discounts
  • Defensive driving course discounts

Young drivers can’t purchase their own policies unless they own their own cars and no longer have the same permanent address as their parents. Keep in mind that drivers under the age of 25 usually pay much higher rates. Adding a young driver to an insurance policy will still increase your premiums substantially, but the amount will depend on your insurance company, the vehicle and where you live.

Average car insurance costs for young drivers by state

Location is another critical factor in determining auto insurance premiums. Every state has different insurance laws, which can impact the rates set by every auto insurance company. Additionally, the risk of getting into an accident may vary by location.

The table below illustrates the average annual full coverage premium for young adults, analyzed by state.

Average annual full coverage premium by age and state

State 20-year-old 21-year-old 22-year-old 23-year-old 24-year-old 25-year-old
Alabama $4,247 $3,103 $2,899 $2,742 $2,583 $2,189
Alaska $3,534 $2,810 $2,627 $2,457 $2,350 $2,050
Arizona $3,391 $2,750 $2,570 $2,399 $2,284 $1,953
Arkansas $4,357 $3,370 $3,092 $2,947 $2,824 $2,470
California $3,980 $3,459 $3,228 $3,064 $2,870 $2,671
Colorado $4,494 $3,411 $3,161 $3,016 $2,891 $2,443
Connecticut $4,420 $3,079 $2,769 $2,546 $2,406 $2,075
Delaware $4,352 $3,045 $2,831 $2,687 $2,568 $2,176
Florida $5,726 $4,580 $4,148 $3,955 $3,828 $3,357
Georgia $4,763 $3,589 $3,426 $3,209 $3,071 $2,562
Hawaii* $1,294 $1,272 $1,273 $1,272 $1,272 $1,272
Idaho $2,648 $2,034 $1,882 $1,795 $1,729 $1,460
Illinois $3,634 $2,807 $2,556 $2,387 $2,267 $1,913
Indiana $2,945 $2,421 $2,207 $2,129 $1,979 $1,682
Iowa $2,657 $2,150 $1,996 $1,907 $1,823 $1,550
Kansas $3,838 $2,998 $2,758 $2,675 $2,597 $2,150
Kentucky $5,444 $4,071 $3,788 $3,649 $3,479 $2,863
Louisiana $5,911 $4,847 $4,390 $4,176 $3,979 $3,426
Maine $2,372 $1,566 $1,476 $1,420 $1,366 $1,107
Maryland $4,473 $3,208 $2,966 $2,732 $2,538 $2,208
Massachusetts* $1,451 $1,451 $1,451 $1,451 $1,451 $1,451
Michigan $5,743 $4,495 $4,165 $3,825 $3,625 $3,038
Minnesota $3,333 $2,856 $2,643 $2,444 $2,329 $2,011
Mississippi $3,840 $2,959 $2,763 $2,614 $2,494 $2,144
Missouri $3,923 $2,984 $2,788 $2,670 $2,562 $2,111
Montana $4,238 $3,183 $3,001 $2,760 $2,639 $2,094
Nebraska $3,414 $2,584 $2,368 $2,262 $2,187 $1,839
Nevada $4,928 $3,903 $3,656 $3,358 $3,250 $2,836
New Hampshire $2,806 $2,199 $2,000 $1,906 $1,806 $1,512
New Jersey $4,232 $3,346 $3,045 $2,818 $2,670 $2,294
New Mexico $3,033 $2,511 $2,348 $2,243 $2,148 $1,862
New York $4,861 $3,754 $3,542 $3,354 $3,207 $2,798
North Carolina $1,653 $1,576 $1,559 $1,542 $1,512 $1,482
North Dakota $2,648 $2,158 $1,995 $1,852 $1,777 $1,576
Ohio $2,679 $2,097 $1,967 $1,832 $1,722 $1,462
Oklahoma $3,791 $3,154 $2,903 $2,739 $2,615 $2,299
Oregon $2,945 $2,395 $2,173 $2,062 $1,972 $1,721
Pennsylvania $3,806 $2,913 $2,735 $2,586 $2,437 $1,964
Rhode Island $4,238 $3,314 $3,060 $2,824 $2,707 $2,324
South Carolina $3,733 $2,661 $2,506 $2,347 $2,250 $1,921
South Dakota $3,232 $2,645 $2,522 $2,379 $2,300 $2,029
Tennessee $3,241 $2,561 $2,358 $2,201 $2,033 $1,789
Texas $4,455 $3,346 $3,126 $2,960 $2,817 $2,353
Utah $3,215 $2,416 $2,221 $2,080 $1,958 $1,651
Vermont $3,539 $2,133 $2,021 $1,911 $1,853 $1,413
Virginia $3,246 $2,409 $2,226 $2,098 $1,996 $1,770
Washington $3,034 $2,235 $2,023 $1,887 $1,794 $1,545
Washington, D.C. $3,863 $3,224 $2,989 $2,766 $2,602 $2,246
West Virginia $3,520 $2,773 $2,530 $2,370 $2,216 $1,912
Wisconsin $2,609 $2,096 $1,922 $1,813 $1,726 $1,505
Wyoming $3,035 $2,616 $2,397 $2,232 $2,142 $1,720

*Hawaii and Massachusetts prohibit using age as a rating factor

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Car Insurance and Accidents

How to lower rates for teen drivers

There are several key ways that young drivers can lower the price of their auto insurance and save money.

The first is by qualifying for discounts, as most major insurers offer discounts young drivers can take advantage of.

Discount How you get it Good grades discountMaintaining good grades, usually at least a 3.0Safety course discountsTaking a defensive driving course approved by your insurerAway at school discountLetting your insurer know when a teen is at school and doesn’t have access to a carSafe driving discountAvoiding accidents and speeding tickets

You can also see if your insurer offers accident forgiveness at a reasonable price. It will cost more in the short term, but young drivers are prone to getting into accidents, and the savings will be significant if that happens.

Another significant way to reduce costs is by omitting coverages — such as collision insurance.

Collision insurance is costly for teen drivers because this demographic is statistically more likely to get into an accident and file an insurance claim than more experienced drivers.

It’s important to remember that if a teen driver is at fault in an accident without collision coverage, they will have to pay for repairs themselves. Unless your car is older and valued at only a few thousand dollars, we recommend you maintain collision insurance.

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