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You may be surprised by how expensive auto insurance is for young adults, but there are ways to find cheap insurance. GEICO, Erie, and Auto-Owners are some of the most affordable choices for young drivers, but you’ll want to consider all your options to find the best rates.
We’ll cover everything you need to know — from the differences between getting your own policy and being on your parents’ to when you can expect rates to begin to drop — in our latest guide.
- Teen drivers pay the highest rates for auto insurance due to their lack of driving experience.
- GEICO, Erie, and Auto-Owners are the cheapest car insurance options for young drivers.
- It’s more affordable for parents to add new drivers to their auto insurance than purchasing a separate policy.
10 Cheapest Car Insurance Companies for Young Drivers
Teenage drivers are more expensive to insure because they’re at higher risk of being involved in an accident. Drivers aged 15 to 19 have the highest rate of motor vehicle accidents of all age groups in the U.S., according to a study by the American Academy of Pediatrics.
They also contribute disproportionately to the number of traffic fatalities. This is largely due to their lack of experience, poorly developed driving skills, and, for some teens, risky behavior.
Fortunately, insurance costs will begin to drop as your teen gets older. But if you have a brand-new driver, there are still ways you can find cheap car insurance.
Let’s take a look at which companies offer the cheapest average car insurance rates for young drivers.
|Insurance Company||Average Monthly Rate|
GEICO is the cheapest overall option for young drivers, with average rates coming in at just $137 per month. That’s more than 65% cheaper than the $397 per month the average teen pays for car insurance. This is likely due to the wide variety of discounts GEICO offers young drivers, including a good student discount for anyone who maintains a “B” average or better.
It’s also interesting to note that the top five insurance companies cost significantly less than the next five. You’ll pay less than $200 per month for coverage through GEICO, Erie, Auto-Owners, State Farm, and American Family, but the next cheapest insurance companies all cost close to or above $300 per month.
National average rates aren’t the best indicator of what you’ll actually pay. After all, car insurance rates are based on a wide variety of factors. Although age is among the most important, the state you live in also plays a big role. We’ll cover that in more detail further down.
Find the Best Rates for Your Young Driver
The Best Car Insurance Companies for Young Drivers in 2023
If you’re trying to add a teen driver to your insurance policy, it’s important to shop around and compare car insurance quotes for the best coverage. Auto insurance rates can vary substantially depending on your ZIP code, deductible, and what discounts your teen qualifies for.
And just because an insurance company is the cheapest doesn’t mean it’s the right option for you. You should also consider the company’s financial strength, consumer ratings, and any unique benefits it has to offer.
We’ve compiled a list of some of the best insurance companies for teens and young drivers in the table below, as well as a more detailed analysis of each company in the sections that follow.
|Insurance Company||Average Monthly Rate||Compare.com Rating|
GEICO has an average monthly rate of $137 and a Compare.com rating (which looks at things like customer reviews, average rates, customer service scores, and more) of 4.65 out of 5 stars. The company also received a financial strength rating of A++ (Superior) from AM Best, which means it’s consistently able to meet its financial obligations and pay its claims.
- Superior website and mobile app
- Wide variety of available discounts
- Gap insurance not available
- Rideshare insurance not available
Erie costs an average of $150 per month for teen drivers but has a lower Compare.com rating (3.80 out of 5) than many companies on this list. Erie also received an AM Best financial strength rating of A++ (Superior) and an A+ rating from the Better Business Bureau (BBB).
Erie’s website states that unmarried drivers under the age of 21 who still live with their parents may be eligible for a discount. The company also offers accident forgiveness and vanishing deductibles.
- Gap insurance available
- Rate Lock program keeps your price the same unless you change your policy
- Not available in all 50 states
- Doesn’t offer usage-based insurance
State Farm has an average monthly rate of $172 and scores well with a Compare.com rating of 4.3 out of 5. The insurer is known for providing excellent customer service — State Farm received an above-average customer satisfaction score in J.D. Power’s 2023 Auto Insurance Study.
Teen drivers with good grades can save up to 25% on car insurance with State Farm, and the savings could last until they turn 25. Young drivers can earn additional discounts for maintaining good grades, taking an approved driver education course, or if they go away to college and leave their vehicle at home.
- Offers a program specifically for young drivers
- Above-average J.D. Power Customer Service score
- Gap insurance not available
- Must purchase policy from insurance agent
Young drivers who purchase auto insurance from America Family pay an average of $183 per month, according to Compare.com data. The company received a Compare.com rating of 3.50, which is the lowest of any auto insurance company on this list. American Family isn’t accredited by the BBB, but it does have an A+ rating.
But the company offers several discounts for young drivers and their families. Young drivers who’re enrolled full time in high school or college can receive a good student discount for earning a 3.0 GPA or better. Even if your student is homeschooled, they can still qualify for the discount if they’re ranked in the top 20% on a nationally recognized test.
- Highly ranked for customer service
- Wide range of available discounts
- Not available in all 50 states
- Higher rates than some competitors
Progressive costs an average of $285 per month for young drivers, and the company received a high Compare.com rating of 4.20. The company has an A rating from the Better Business Bureau but was rated below average by J.D. Power in overall customer satisfaction in its latest study.
Progressive offers multiple discounts to teen drivers who are 18 or younger. The average savings will vary, but teens can earn a good student discount and receive additional savings if they’ve been consistently insured for 12 months or more. And, if your teen driver has their own car, Progressive will add a multi-vehicle discount to your policy.
- Numerous available discounts for teen drivers
- Rideshare coverage available
- More expensive than the other four companies listed
- Below-average J.D. Power Customer Satisfaction score
Should Young Drivers Get Their Own Policy?
Adding a young driver to your current insurance policy is almost always easier and more affordable than purchasing a separate policy. And some states restrict teens from buying their own insurance policy if they’re under the age of 18.
Let’s take a look at how different companies charge young drivers, depending on if they stay on their parents’ policy or get their own.
|Insurance Company||Cost of Adding Teen to Policy||Cost of Teen on Their Own Policy|
It’s less expensive to add a teen driver to your current policy with every company listed above. The average parent saves around 7% by adding a young driver to their policy, according to our analysis. The only time you may need to purchase a separate policy is when the car is listed in the young driver’s name and not yours.
How to Get Cheaper Car Insurance as a Young Driver
Car insurance for teen drivers tends to be more expensive because young drivers are more likely to be involved in an accident than any other age group. But that doesn’t mean you have to just accept sky-high rates.
Here are a few ways teen drivers can save money on car insurance:
- Maintain a good driving record: Your driving record is one of the biggest factors affecting your car insurance premiums. The best way teens can save money on car insurance is by maintaining a good driving record. They can do this by engaging in safe driving practices and avoiding speeding tickets and other moving violations.
- Maintain good grades: Most insurance companies give young drivers a discount for getting good grades. This is likely because young drivers with good grades are shown to be less of an insurance liability.
- Buy a safe vehicle: Finally, teen drivers will usually pay less for insurance if they drive a safer vehicle. Look for cars with safety features like anti-lock brakes and anti-theft systems.
- Increase your deductible: The deductible is the amount you pay out of pocket before your insurance coverage kicks in. The higher your deductible, the less you’ll pay in insurance premiums.
- Compare quotes from multiple companies: No single insurance company is the cheapest for everyone, so the best way to save on car insurance is to get quotes from as many companies as possible. We recommend getting quotes every time your policy renews to ensure you’re still getting the best rates.
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Car insurance discounts for young adults
Here are the most common car insurance discounts young drivers can take advantage of:
- Good student discount: A good student discount is usually available to young drivers who earn a B average or better in school. These discounts are typically available for high school and college students.
- Defensive driving discount: Many insurance companies offer a discount to teens who take a nationally recognized defensive driving course.
- Multi-vehicle discount: If your teen driver has their own car but is listed on your insurance plan, you could receive a multi-vehicle discount from your insurance company.
- Student-away-from-home discount: A student-away-from-home discount is available to college students who’re away at school without a vehicle and only drive their car when they’re home during breaks.
Average Cost of Young Driver Car Insurance by Age
Age is one of the most important factors affecting car insurance rates, and young drivers tend to pay a lot more than older ones. We’ve broken down the average rates for different ages of young drivers in the table below.
|Age||Average Monthly Rate|
Auto insurance rates are the highest for 16-year-old drivers, according to our analysis, but these rates steadily decline as drivers near age 25.
In particular, once drivers reach the age of 22, the average rates drop below $200 per month. That could be because most young drivers are finishing college at this age and have gained significant driving experience.
Average Cost of Young Driver Car Insurance by State
The state you live in also has a big effect on the rates you receive, and these prices can differ drastically depending on your ZIP code. For example, if you live in an urban area with high crime rates, you can expect to pay more for car insurance.
Let’s take a look at how rates for young drivers vary from state to state.
|State||Average Monthly Rate|
The most expensive states for auto insurance are Louisiana and New York. Louisiana is known for having higher rates of theft and insurance fraud, and the premiums may also cost more due to highway density.
New York is a riskier area for driving — especially in New York City — which may contribute to the high insurance costs. And New York, like Louisiana, tends to have higher rates of auto theft than other states.
Young Driver Car Insurance FAQs
For young drivers, it’s important to find auto insurance that provides the necessary coverage without being a financial burden. Here’s some additional information about how teen drivers can find affordable car insurance.
Is it cheaper to put my teen on their own car insurance policy?
You’ll almost always receive the cheapest rates if you add a teen driver to your current insurance policy. The only time teen drivers may need their own policy is when the vehicle is listed in their name instead of their parents’.
What is the cheapest insurance company for 18-year-olds?
On average, GEICO, Erie, and Auto-Owners are the cheapest options for 18-year-old drivers, with average rates as low as $137 per month. But the exact costs will vary, so it’s important to shop around and compare your options.
When should I add my teen to my car insurance?
Many insurance companies allow you to add your teen to your car insurance at no charge once they receive their learner’s permit. It’s a good idea to talk to your insurer first and start shopping around for policies before they become a licensed driver.
What is the best auto insurance for young adults?
GEICO, Erie, State Farm, American Family, and Progressive are the best auto insurance companies for young adults, according to our analysis. These companies are not only the most affordable, but each one is highly rated for customer service and financial stability.
Are newer cars cheaper to insure for young drivers?
No. Newer cars tend to be more expensive to insure because they’re more expensive to repair or replace. Young drivers should look for a used vehicle that’s highly rated for safety.
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information. All of the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.
- Insurance Information Institute “Auto insurance for teen drivers,” Accessed Oct. 5, 2023.
- American Academy of Pediatrics “The Teen Driver,” Accessed Oct. 5, 2023.
- Better Business Bureau “Erie Insurance Group,” Accessed Oct. 5, 2023.
- J.D. Power “2023 U.S. Insurance Shopping Study,” Accessed Oct. 5, 2023.
- Better Business Bureau “American Family Insurance,” Accessed Oct. 5, 2023.
- Better Business Bureau “Progressive Insurance,” Accessed Oct. 5, 2023.
- Insurance Information Institute “How to save money on car insurance,” Accessed Oct. 5, 2023.
- Insurance Information Institute “What determines the price of an auto insurance policy?” Accessed Oct. 5, 2023.
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