Auto Insurance for Young Adults (2024)
Erie offers the cheapest auto insurance for young adults with average rates of $70 per month. USAA is another top choice for cheap insurance for young drivers, at an average cost of $85 per month. While car insurance for new drivers can cost $5,000 per year more than for drivers over 30, there are ways to save.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Oct 8, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 8, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Auto insurance for drivers under 25 is automatically more expensive due to their inexperience behind the wheel
- Car insurance for someone who is 21 can be cheaper than teen insurance rates but is still more expensive than the national average
- Young drivers can save money by shopping with companies that offer usage-based insurance and other safe driver discount programs
Auto insurance for someone who is 25 years old or younger comes with some of the highest rates. Why is auto insurance so high for people under 25 years old?
Young drivers have less experience on the road and pose a higher risk for insurance companies. In turn, auto insurance rates for drivers under 25 are often double the national average.
You can find the best auto insurance for young adults by shopping around and comparing quotes from multiple companies. Most insurers offer discounts for teens, students, and young drivers under 25. Many more offer discounts for existing policyholders who add their child to their auto insurance.
If you need cheaper car insurance, this guide covers which companies have the cheapest insurance for young drivers. We compare car insurance rates by age and discuss which discounts reduce rates the most for drivers under 25.
Company Facts
Average Monthly Rate For Good Drivers
A.M. Best Rating
Complaint Level
Pros & Cons
Company Facts
Average Monthly Rate For Good Drivers
A.M. Best Rating
Complaint Level
Pros & Cons
Company Facts
Average Monthly Rate For Good Drivers
A.M. Best Rating
Complaint Level
Pros & Cons
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How Much Auto Insurance for Young Drivers Costs
According to the National Highway Traffic Safety Administration (NHTSA), men are involved in more fatal accidents than female drivers. Young drivers are also more likely to be involved in a fatal crash than older drivers. This is one of the major reasons why the average cost of car insurance for a 19-year-old male is so expensive.
This chart shows the average car insurance rates by age and gender for younger drivers.
Drivers under 25 can pay up to $5,000 or more per year for coverage than drivers over the age of 30. Car insurance rates go down at 25, but men continue to pay more for car insurance even as they get older. Auto insurance rates are higher for males due to several reasons, such as getting into more accidents than women.
Factors Affecting the Cost of Auto Insurance for Young Drivers
Along with age and gender, where you live will also significantly impact how much car insurance for young drivers costs.
For example, drivers in big cities with more traffic and higher rates of auto theft pose more of a risk to the insurance company. So if you’re a young driver under 25 living in a major city, you can expect to pay more for coverage.
Other factors that affect auto insurance rates for drivers under 25 include the kind of car they drive and how often. Newer vehicles will cost more to insure, and auto insurance companies raise rates for drivers who are on the road for more than 12,000 miles per year.
Why Auto Insurance Costs More for Young Adults
Driving record has a big impact on car insurance for anyone under 25 years old, mostly because young drivers lack the experience to build a trustworthy record. Auto insurance companies check driving records of young drivers in a variety of ways.
Without the driving experience to prove you are a good driver, you will pay higher-than-average rates. And if you get into an accident before you turn 25, your auto insurance rates will continue to be expensive. Being a safe driver is the best way to get cheaper car insurance for young drivers.
Age That Auto Insurance Goes Down
On average, car insurance rates go down after drivers enter their 20s. However, car insurance rates for 21-year-olds and new drivers over 21 will be as high as for new teen drivers. This is because insurance companies are more concerned with driving experience than age.
When does car insurance go down for males? By the time young male drivers turn 25 years old, insurance companies can use their driving records to better determine rates.
You will see auto insurance rates for all drivers over 25 start to drop the longer they spend behind the wheel. And rates will continue to decrease if they avoid speeding tickets and collisions, as a speeding ticket affects auto insurance rates. Read more: Best Auto Insurance Companies for Drivers With Speeding Tickets
The Company With the Cheapest Auto Insurance for Young Drivers
The best car insurance for young adults will have discounts catering to new drivers, making coverage more affordable.
Full Coverage Auto Insurance Average Rates for 25-Year-Olds by Company
Companies | Monthly Male Rates | Monthly Female Rates |
---|---|---|
Allstate | $190 | $181 |
Auto Owners | $111 | $105 |
Erie | $71 | $68 |
Geico | $93 | $97 |
Nationwide | $150 | $136 |
Progressive | $146 | $141 |
State Farm | $111 | $101 |
Travelers | $116 | $107 |
U.S. Average | $150 | $138 |
USAA | $85 | $80 |
You should shop around for quotes with the following companies to find the best insurance for young drivers:
- Erie
- Farm Bureau
- USAA
- Geico
- State Farm
- Auto-Owners
- Progressive
- Allstate
- Travelers
- Nationwide
Erie auto insurance reviews show they offer some of the most competitive rates. However, Erie is only available in 12 states. Geico and USAA offer the next most affordable rates across all 50 states.
Some young drivers under 25 may also benefit from companies with usage-based auto insurance (UBI), which uses telematics systems to measure a driver’s speed, braking, mileage, and more.
However, UBI is not available with every company. And not every insurer will offer the same discounts to drivers under 25.
Let’s take a closer look at these companies’ availability, policy options, and discounts. We also discuss customer complaints and satisfaction ratings through the National Association of Insurance Commissioners (NAIC) and J.D. Power to better determine which is the best auto insurance company for drivers under 25.
Erie Insurance
Erie Insurance is the best company for cheap rates. Although it’s a small, regional insurer, it offers some of the most competitive insurance rates for young drivers.
Pros and Cons of Erie Insurance for Drivers Under 25
Pros | Cons |
---|---|
Auto policies automatically include pet coverage up to $1,000. | Coverage is only available in 12 states and Washington, D.C.: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. |
Erie will pay for travel expenses (hotels and meals) if you are stranded due to car troubles covered by your policy. | Erie’s NAIC ratio is 1.1, meaning it has the average number of complaints per year. |
Add-ons like Erie Rate Lock prevent your rates from increasing unless you change your policy. |
Unfortunately, regional insurance means availability is limited. You may have to shop with other major insurance companies if Erie is not available in your home state.
Farm Bureau Insurance
Farm Bureau is the best company for customer satisfaction according to Farm Bureau auto insurance reviews. It has the lowest NAIC complaint ratio of any other company on this list.
Pros and Cons of Farm Bureau Insurance for drivers under 25
Pros | Cons |
---|---|
Driveology UBI helps young drivers save money based on good driving habits. | The company doesn’t offer specialty coverages. |
Coverage is available in all 50 states, with some customers earning a bonus if their local insurer is a profitable mutual company. | Drivers must be a member to buy a policy. |
Farm Bureau has far fewer complaints than other companies its size, based on its NAIC ratio of .42. |
Unfortunately, coverage is limited to members only, and you won’t find coverage for sports cars or other high-performance vehicles.
USAA
USAA is another top choice for cheap insurance for young drivers according to our USAA auto insurance review. It also offers a UBI program in participating states.
Pros and Cons of USAA Insurance for Drivers Under 25
Pros | Cons |
---|---|
Consistently one of the most affordable auto insurance companies across the country. | Coverage is only available to military members and their families. |
Drivers under 25 automatically save 10% on their own policy if their parents are existing policyholders. | USAA has more than double the average amount of customer complaints. |
SafePilot UBI can save young drivers up to 30% off their rates. |
However, since coverage is limited to U.S. military members, you may have to shop with different insurers in your area to find a policy.
Geico
Our Geico auto insurance review shows the company offers the cheapest rates to young drivers regardless of membership or affiliation. Coverage is also available across the country, but UBI may be limited in some states.
Pros and Cons of Geico Insurance for drivers under 25
Pros | Cons |
---|---|
Coverage is available to drivers in all 50 states and Washington, D.C. | Increases rates more than other companies for accidents or drivers with poor credit. |
Insurance rates tend to be 25%-27% less than competitors. | Geico’s NAIC rating is 1.33, meaning it has slightly more complaints than average. |
DriveEasy UBI saves money for drivers under 25 with good driving habits. | Auto insurance discounts vary by state. |
Unfortunately, if you need cheap auto insurance after an accident, you’ll likely find better rates with another company.
State Farm
Our State Farm auto insurance review shows the company is the top choice among car insurance customers. It’s the largest insurer by market share and offers a long list of discounts to drivers under 25.
Pros and Cons of State Farm Insurance
Pros | Cons |
---|---|
Discounts cater to young drivers under 25, including the Steer Clear Driver Program. | State Farm has slightly more complaints than average, with an NAIC ratio of 1.44. |
Drive Safe & Save UBI can save young drivers up to 30% on their rates. | |
It is the most popular insurance company in the United States based on market share. |
However, State Farm customers complain about slow claims responses.
Auto-Insurance Owners
Our Auto-Owners auto insurance review shows that smaller companies may not offer extensive discounts, but competitive rates are available to young drivers with good records.
Pros and Cons of Auto-Insurance Owners Insurance for drivers under 25
Pros | Cons |
---|---|
High customer satisfaction ratings, with a low NAIC ratio (.86). | Coverage is only available in 26 states. |
The Personal Automobile Plus package covers cell phones, lost keys, personal items stolen from your vehicle, and more. | Since it’s a smaller company, it doesn’t offer an extensive list of auto insurance discounts. |
Teen drivers earn additional discounts when they install a GPS monitor in their cars. | Drivers cannot buy policies online. |
You may not find Auto-Insurance Owners’ coverage in your state. However, it’s worth comparing insurance quotes with an agent from this company if coverage is available. Find out how to get quotes for auto insurance here.
Progressive
This is the best company for safe drivers — Progressive Snapshot discounts can save young drivers over 30% by tracking safe driving habits. This is one of the best Progressive auto insurance discounts you can receive.
Pros and Cons of Progressive Insurance drivers under 25
Pros | Cons |
---|---|
Offers low rates for high-risk drivers, which includes teens and young drivers under 25. | Snapshot UBI will raise your rates if you exhibit poor driving habits. |
Snapshot UBI program can earn young drivers additional discounts with safe driving habits. | Progressive’s NAIC ratio is 1.7, and it has poor customer satisfaction ratings. |
Safe drivers save an average of 31% off their rates. |
Unfortunately, if you speed or drive at night, Progressive’s usage-based insurance program can actually raise your rates.
Allstate
Our Allstate auto insurance review shows the company can be affordable for drivers under 25 who take advantage of the Milewise usage-based program. However, coverage is limited by state, and you will only earn discounts by driving less than 10,000 miles per year.
Pros and Cons of Allstate Insurance for drivers under 25
Pros | Cons |
---|---|
Coverage is available in all 50 states through a licensed network for agents. | Milewise UBI is only available in 21 states. |
Milewise UBI generates cheaper rates for young drivers who drive less than average. | Despite a long list of discounts, it still has more expensive auto insurance quotes than similar companies. |
Allstate’s NAIC ratio is very high (2.73), and it has poor customer satisfaction ratings. |
Allstate’s customer satisfaction ratings are also very poor, and it has the highest complaint ratio of any other company on this list.
Travelers
Depending on where you live, Travelers can provide competitive auto policies for drivers under 25 according to this Travelers auto insurance review. However, your quotes and available discounts will vary based on where you live.
Pros and Cons of Travelers Insurance for drivers under 25
Pros | Cons |
---|---|
Teens and students can earn discounts for good grades, going to college away from home, and enrolling in driver’s education classes. | Coverage is only available in 43 states. |
Offers additional discounts for new drivers. | Auto insurance quotes can be more expensive than average for drivers of all ages in some states. |
Travelers has fewer customer complaints than average, with a low NAIC ratio (.43) |
Travelers Insurance is not available in Alaska, Hawaii, Louisiana, Michigan, South Dakota, Washington, or West Virginia.
Nationwide
Nationwide is the best company for policyholders who want to add teen and new drivers to their coverage. Nationwide SmartRide and SmartMiles UBI can further reduce rates. These are just some of the benefits of Nationwide according to our Nationwide auto insurance review.
Pros and Cons of Nationwide Insurance for drivers under 25
Pros | Cons |
---|---|
SmartRide and SmartMiles UBI programs can reward young drivers with cheaper rates based on driving habits or mileage. | Coverage is only available in 46 states. |
Offers competitive rates to existing customers who add a teen driver to their policy. | Nationwide has the average number of complaints but exceptionally poor customer satisfaction ratings. |
Nationwide is not available in Alaska, Hawaii, Louisiana, or Massachusetts.
The Company With the Best Auto Insurance Discounts for a Teenager
Most of the major auto insurance companies offer good student and defensive driving discounts to new drivers, including the insurers listed above.
This table shows other common discounts offered by some of the top auto insurance companies.
Auto Insurance Discounts for Drivers Under 25
Auto Insurance Discounts | Allstate | American Family | Farmers | Geico | Liberty Mutual |
---|---|---|---|---|---|
Adaptive Cruise Control | x | ||||
Adaptive Headlights | x | x | |||
Anti-Lock Brakes | x | x | x | x | x |
Anti-Theft | x | x | x | x | x |
Claim Free | x | x | x | x | x |
Continuous Coverage | x | x | x | x | |
Daytime Running Lights | x | x | x | x | x |
Defensive Driver | x | x | x | x | x |
Distant Student | x | x | x | x | |
Driver's Ed | x | x | x | x | x |
Driving Device/App | x | x | x | x | |
Early Signing | x | x | x | x | |
Electronic Stability Control | x | x | x | x | |
Emergency Deployment | x | ||||
Family Legacy | x | x | |||
Family Plan | x | x | |||
Farm Vehicle | x | x | x | ||
Federal Employee | x | x | x | ||
Forward Collision Warning | x | ||||
Full Payment | x | x | x | x | x |
Further Education | x | x | |||
Garaging/Storing | x | ||||
Good Credit | |||||
Good Student | x | x | x | x | x |
Green Vehicle | x | x | x | ||
Homeowner | x | x | x | ||
Lane Departure Warning | x | ||||
Life Insurance | x | ||||
Low Mileage | x | x | x | x | x |
Loyalty | x | x | |||
Married | x | ||||
Membership/Group | x | x | |||
Military | x | x | x | x | |
Multiple Drivers | |||||
Multiple Policies | x | x | x | x | x |
Multiple Vehicles | x | x | x | x | |
New Address | x | ||||
New Customer/New Plan | x | ||||
New Graduate | x | ||||
Newer Vehicle | x | x | x | ||
Newly Licensed | x | ||||
Newlyweds | x | ||||
Occupation | x | x | x | x | |
On Time Payments | x | ||||
Online Shopper | |||||
Paperless Documents | x | x | x | ||
Paperless/Auto Billing | x | x | x | x | |
Passive Restraint | x | x | x | x | x |
Safe Driver | x | x | x | x | |
Seat Belt Use | x | ||||
Students & Alumni | x | x | x | ||
Volunteer | x | ||||
Young Driver | x |
However, local companies in your state may offer unique discounts, and you may find additional ways to save money with one company over another based on your unique circumstances. For example, Erie offers additional coverage for drivers away at college.
We recommend comparing quotes, discounts, and policy options from at least three companies before you buy auto insurance for drivers under 25. This way, you can guarantee you’re getting the best coverage at the best price for young drivers in your area.
How Young Drivers Can Save Money on Auto Insurance
Avoiding accidents and speeding tickets is the easiest way for drivers under 25 to save money on auto insurance. A clean driving record will get you the cheapest car insurance quotes for young drivers.
Points can negatively affect your auto insurance rates. Although having points on your license will raise your auto insurance rates, young drivers can still save money on car insurance by doing the following:
- Maintaining good grades. Students who maintain a B average or higher can earn a discount of 3%-10%.
- Going to driving school. Be proactive and take a defensive driving course to reduce your rates.
- Driving an older vehicle. The cheapest vehicles for drivers under 25 will be from 2018 or earlier.
- Reducing your coverage. If you drive an older vehicle, you can consider dropping collision or comprehensive coverage for cheaper insurance rates.
- Increasing your deductibles. Insurance companies charge less per month if you’re willing to pay more out of pocket for repairs.
- Etching your VIN into the windshield. This reduces auto theft and can earn you 5%-15% off your rates with a safety discount.
- Signing up for usage-based insurance. UBI tracks driving habits, including speed and braking, and safe drivers pay much less for coverage.
- Shop for new coverage before your renewal period. Compare auto insurance quotes online before you renew just in case another insurer offers better rates.
Although reducing your coverage can lower your monthly rates, check your state minimums before dropping any insurance. Liability-only will have the cheapest rates, but you still need to meet the minimum to legally drive in your state.
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How Much Coverage Drivers Under 25 Need
The auto insurance laws in your state determine how much insurance drivers need. Driving without the required amount of coverage can cost you your license and raise your rates in the future.
Here is the minimum amount of coverage drivers under 25 need:
- Liability. This type of coverage pays for damages and injuries you cause to others in an accident, but the policy will not apply to your own injuries or property damage.
- Personal injury protection (PIP). PIP covers injuries you or your passengers sustained in a collision and will pay back lost wages if you miss work for recovery.
- Medical payments (MedPay). MedPay covers your medical costs after an accident or collision but will not cover lost wages.
Not every state will require PIP or MedPay, so check your state laws carefully before you buy a teen or young driver auto policy.
Different Types of Auto Insurance for Teens
As long as you carry your state’s minimum requirements, you can customize teen auto insurance coverage to meet your needs. For example, most companies offer policy add-ons to provide additional coverage for drivers under 25.
Auto insurance add-ons vary by company, but roadside assistance is the most common type for young drivers. For an additional fee, roadside assistance will provide reimbursement for towing, tire changes, and more.
Other types of insurance add-ons help young drivers who use their vehicles for work. If you drive for a rideshare or delivery service, adding rideshare insurance or commercial coverage to an existing policy will be much cheaper than buying a separate business policy.
How Auto Insurance Protects Teen Drivers
Due to their inexperience behind the wheel, teens and young drivers are more likely to get into an accident. And since young drivers are more likely to be students or have low incomes, having auto insurance will ensure they are protected from paying hefty medical and repair bills after a collision.
Teen auto insurance rates may be expensive, but having coverage will protect young drivers from paying out of pocket for injuries and vehicle repairs. Full coverage insurance is the best policy for teens because it provides the most protection.
How to Get the Best Auto Insurance for Drivers Under 25
Drivers under 25 should sign up for usage-based car insurance programs and telematic systems that base rates on driving habits and mileage. Safe driving habits can reduce rates by 30% or more, and most major insurers offer UBI and other telematics programs.
Discounts are another excellent way to find the best auto insurance companies for drivers under 25. Look for insurers that offer discounts designed for young and new drivers, such as good student and driving school discounts.
If you’re looking for the best auto insurance company near you, take advantage of free online comparison tools like the one below to start comparing quotes online. Get quotes from at least three different companies in your area to get an average, and then start asking about discounts.
It may take some time to find the best insurance for young adults, but researching quotes and discounts online before you buy will guarantee that you aren’t overpaying for car insurance.
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Frequently Asked Questions
What is the best car insurance for young drivers?
Erie insurance offers the most competitive rates to young drivers, but coverage is only available in 12 states. Farm Bureau, USAA, and GEICO offer the next most affordable rates.
Where can you get cheap car insurance for a new driver?
New drivers will get the cheapest insurance from Erie, USAA, and GEICO. Unfortunately, coverage is limited with Erie and USAA, but GEICO’s coverage is available in all 50 states.
How will adding a young driver to my policy affect my rates?
Adding a teen driver or anyone under 25 to an auto insurance policy will raise your rates. The good news is that your rates will not be nearly as high if you were to buy a new policy for a young driver.
Why is car insurance so high for people under 25 years old?
Drivers under 25 years old pay the most for auto insurance due to inexperience. Inexperience behind the wheel leads to an increased risk of accidents and insurance claims, so companies charge higher rates.
Why is auto insurance more expensive for young adults?
Auto insurance tends to be more expensive for young adults due to several factors, including lack of driving experience, higher risk of accidents, and statistical data showing that young drivers are more likely to engage in risky driving behaviors. Insurance companies calculate premiums based on risk factors, and since young adults are considered higher risk, their insurance rates are typically higher.
Are there any ways for young adults to save money on auto insurance?
Yes, young adults can take several steps to potentially save money on auto insurance:
- Good student discounts: Maintaining good grades in school may qualify young adults for discounts with certain insurance providers.
- Defensive driving courses: Completing a defensive driving course can sometimes result in a discount on auto insurance premiums.
- Bundling policies: If a young adult has other insurance policies, such as renters or homeowners insurance, bundling them with their auto insurance can lead to savings.
- Comparison shopping: It’s essential to shop around and compare quotes from different insurance companies to find the most competitive rates.
- Maintaining a clean driving record: Avoiding traffic violations and accidents helps build a good driving history, which can lead to lower premiums over time.
Can young adults stay on their parents’ auto insurance policy?
In many cases, young adults can stay on their parents’ auto insurance policy if they are living in the same household. However, this may vary depending on the insurance company’s specific rules and guidelines. It’s important to consult with the insurance provider to determine the eligibility and any potential limitations.
When should young adults consider getting their own auto insurance policy?
Young adults should consider getting their own auto insurance policy when they move out of their parents’ household, purchase their own vehicle, or if their parents’ insurance company does not allow them to stay on the policy. It’s recommended to discuss the situation with the insurance provider to determine the best course of action.
What type of coverage do young adults typically need?
The type of coverage young adults need may vary based on individual circumstances and preferences. However, it’s generally advisable to have at least the following coverage:
- Liability coverage: This coverage is typically required by law and helps cover costs if the young adult is at fault in an accident and causes injury or property damage to others.
- Collision coverage: This coverage helps pay for repairs or replacement of the young adult’s vehicle if it is damaged in a collision, regardless of fault.
- Comprehensive coverage: This coverage protects against damage or loss due to non-collision events, such as theft, vandalism, or natural disasters.
- Uninsured/underinsured motorist coverage: This coverage provides protection if the young adult is involved in an accident with a driver who does not have insurance or has insufficient coverage.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.