How to Get Cheap Car Insurance Under 25
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The younger a driver is, the less experience they have behind the wheel, making insurance more expensive. Although getting car insurance under 25 can be costly, you don’t have to settle for the most expensive rates.
In this article, we’ll discuss the average cost of car insurance for drivers under 25 and why it’s so expensive. We’ll also provide tips on saving on auto insurance and the top five companies with cheap car insurance for under 25 drivers.
- The average cost of car insurance for drivers under 25 is $287 per month.
- Compared to an 18-year-old driver, 25-year-olds see an average monthly auto insurance savings of $300.
- Nationwide, State Farm, Travelers, Erie, and American Family offer some of the cheapest car insurance for drivers under 25.
How Much Does Car Insurance Cost for Drivers Under 25?
The average cost of auto insurance for drivers under 25 is $287 per month. They pay the highest rates compared to all other age groups, who pay an average of $215 per month.
These average rates give you an idea of what it could cost for car insurance if you’re under 25. But keep in mind, rates vary widely across the country. Your rate could change if you move across town.
Besides location, insurance companies use other factors to determine how much you’ll pay for car insurance. Your age, gender, driving record, claims history, and whether you’re on your own or your parents’ policy can also affect your auto insurance premium.
Why is car insurance so expensive for drivers under 25?
We spoke with insurance expert John Espenschied, owner of Insurance Brokers Group in Missouri, to understand why car insurance under 25 is so expensive.
“Young drivers might not be as familiar with the rules of the road or how to handle different driving situations,” he says. They also make riskier driving decisions, like speeding, not wearing a seat belt, or driving under the influence.
The leading cause of death for teens in the U.S. is car accidents, according to the CDC. In addition, data from the Insurance Institute for Highway Safety (IIHS) shows accident risk is highest when newly licensed teens first get their driver’s licenses. Teens aged 16–19 are three times as likely to be involved in a fatal crash as drivers 20 and older.
As young drivers gain more experience and maturity, they also make less risky driving decisions, lowering the cost of car insurance as they age.
Does car insurance get cheaper when you turn 25?
Although it can be hard to budget for expensive car insurance rates, the high cost is temporary. Car insurance does get cheaper when you turn 25 — as long as you avoid tickets and at-fault accidents.
|Age||Avg. Monthly Rate|
The average monthly cost for car insurance is $486 for an 18-year-old, but once that same driver turns 25, the average rate drops to $187 per month. That’s a savings of almost $300 per month for the same coverage, just by being more confident and making safer driving decisions. Rates get even cheaper as you reach your 40s.
Our Top 5 Tips to Save on Car Insurance If You’re Under 25
Young drivers can get sticker shock when gathering car insurance quotes. But there are ways to get the cheapest insurance if you follow these money-saving tips. For example, staying on your parents’ policy and driving an older car can help keep rates low. So can practicing safe driving habits, increasing your deductibles, and shopping quotes regularly.
Below are our top five tips under 25 drivers can use to save money on their next car insurance policy:
1. Stay on your parents’ policy, if possible
Staying on your parents’ policy can offer a lot of savings. You can remain on your parents’ policy while you live with them full-time, even if you’re away at college. If you have a car, you can usually stay on your parents’ policy if you garage it at their address. And if you don’t have a car, it’s often cheaper to use one of your parents’ vehicles for the rating.
Teens and under-25 drivers who go away to college might be able to save more if they don’t take a car with them. Most insurers offer discounts for college students who attend school at least 100 miles from home. Drivers under 25 can also get a good student discount if they maintain a B or above GPA in high school or college.
2. Practice safe driving (or even take a defensive driver course)
Keeping a clean driving record without tickets, DUIs, or at-fault accidents can make you eligible for a safe driver discount. The more you practice safe driving habits, the better your insurance rates could be. “This means following the rules of the road, driving safely, and being aware of your surroundings,” says Espenschied.
Consider also taking an insurer-approved defensive driving course to learn better driving techniques. Another way to save on car insurance is to participate in an insurer’s telematics program. It tracks your driving trips and grades you on your driving habits. The better you drive, the more you can save.
3. Drive an older, less expensive vehicle
When you drive an older, cheaper car, you can also get cheaper auto insurance. You might not need comprehensive or collision coverage if the car isn’t worth much. Drivers can remove optional coverages, like gap insurance, for paid-off vehicles.
Even with an older car, you should still consider owning one with safety features. Not only could you get a safety feature discount, but driving a safer car can help reduce your risk of injury or death if you get into an accident.
4. Consider a higher deductible
When you choose a lower deductible, the insurance company pays more, but you also pay a higher premium. By going with a higher deductible, you take on more risk if you have to file a claim, but you also get cheaper insurance rates. Just make sure you can afford to pay the higher deductible if your car gets damaged from a covered loss.
5. Shop around and compare quotes regularly
Shopping around and comparing car insurance quotes regularly is another way to get the cheapest car insurance if you’re under 25.
“Rates can vary significantly from company to company, so it’s important to compare quotes before you buy a policy,” Espenschied says.
We suggest doing this at each renewal, annually, or when you make a policy change, like buying a different car or changing your coverage.
Compare the same coverage types, deductibles, and limits when getting quotes, letting you see which company offers the cheapest auto insurance for your age and driving profile. We recommend comparing quotes from at least three different insurers.
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Top 5 Cheapest Car Insurance Companies for Drivers Under 25
We compared rates from multiple companies to help you find the best cheap car insurance for drivers under 25. Our findings show these five companies offer some of the cheapest rates for young drivers:
Available discounts, driving programs, and different rating structures can make some companies cheaper than others. Knowing each company’s options for young drivers can help you decide which insurer best fits your budget.
5. Nationwide: $226/month
Nationwide Insurance offers drivers multiple ways to save on car insurance. Students between 16 and 24 can get a good student discount with a B or better GPA. Nationwide also offers a defensive driving course discount for drivers who complete the class.
You could save even more if you don’t drive much with Nationwide’s SmartMiles program. You can also show off your safe driving skills by participating in Nationwide’s SmartRide telematics program, with up to 40% in savings available.
4. State Farm: $212/month
State Farm’s Steer Clear program offers drivers under 25 with a clean driving record up to 15% savings after completing the program. It also has a telematics program, Drive Safe & Save, where young drivers can save up to 30% on their insurance.
State Farm also has three young driver discounts available:
- Good student discount
- Student away at school discount
- Driver training discount
3. Travelers: $212/month
Like State Farm, Travelers offers three discounts to lower car insurance costs for young drivers. College students can get the student away at school discount, and any student under 25 can get a good student discount with a B average or better.
Travelers also offers a driver training discount for completing an approved education course. Travelers’ IntelliDrive, a 90-day telematics program, is another option, saving drivers up to 30% on car insurance for practicing safe driving.
2. Erie Insurance: $200/month
Erie offers several discounts for young drivers under 25 who aren’t married. The youthful driver discount is available if you live with your parents. If you stay with Erie when you get your own policy, you’re also eligible for the youthful driver longevity discount.
There’s also the driver training discount for completing an approved course. Young drivers can also save by completing the ADEPT Driver teenSMART crash reduction online training program.
1. American Family Insurance: $185/month
American Family offers the cheapest rates for a young driver. Using the Teen Safe Driver app for a year or for 3,000 miles, whichever comes first, saves you 10% on insurance premiums.
You can get the young volunteer discount if you complete 40 hours of nonprofit volunteering per year. There’s also the good student and college student away at school discounts. And you can get a generational discount if your parents have American Family insurance and you get your own policy.
Other Things to Consider If You’re a New Driver Under 25
Taking advantage of the driver training programs many insurance companies offer provides benefits besides insurance savings. The programs help make you a safer driver, which helps you avoid tickets, accidents, and distracted driving.
By keeping a clean driving record, you can get other perks, like accident forgiveness. If you cause an accident, accident forgiveness can protect your rates from significant increases at your next renewal.
You should also consider the car you drive. Some car makes and models are cheaper to insure than others. Choosing a safe vehicle can lead to cheaper insurance rates, even if you must insure it with full coverage instead of liability-only.
Espenschied advises installing safety features to lower your car insurance rates. Some may be automatic, like airbags and seat belts. But others you can have installed, like an anti-theft device.
Avoid distracted driving at all costs. Don’t play with the radio, use your phone, turn around to talk to a passenger, or take your eyes off the road while driving. The NHTSA says that at 55 mph, taking your eyes off the road for five seconds is the same as driving a football field with your eyes closed.
Car Insurance Under 25 FAQs
Do you still have questions about getting car insurance as a driver under 25? Here are the answers to some of the most common questions on this topic.
Who has the cheapest car insurance for drivers under 25?
We found American Family has the cheapest car insurance for drivers under 25. The average monthly rate for this age group is $185 per month. Your rate could differ because of your ZIP code, driving record, car make and model, and coverage choices.
Is it true that your car insurance rates go down after you turn 25?
Yes, your car insurance rates go down after you turn 25, as long as you keep a clean driving record. For 18-year-old drivers, the average monthly cost of car insurance is $486. But for 25-year-old drivers, the monthly rate is $187, a difference of almost $300.
What are some good car insurance companies for first-time drivers?
First-time drivers should consider getting quotes from several car insurance companies for the best rate. We recommend comparing rates from companies like Nationwide, Travelers, Erie, State Farm, and American Family. Comparing quotes from at least three carriers can help you find the cheapest insurance for new drivers.
How much lower will my car insurance be once I hit 25?
The change in your car insurance rate once you hit 25 depends on multiple factors. Your driving record, claims history, ZIP code, insurance company, vehicle, and coverage options will determine your savings. Our data shows the average monthly decrease is around $300 when you reach 25.
Methodology: All the data referenced in this article has been gathered in collaboration with Quadrant Information Services. We analyzed more than 2.5 million rows of carrier-reported data to calculate the average rates referenced above. All rates are based on an insurance profile of a single-vehicle policy for a Honda Accord driver. For more information on how we calculate rates, please reference our data methodology.
Centers for Disease Control and Prevention. “Teen drivers factsheet.” Accessed May 23, 2023.
Insurance Institute for Highway Safety. “Fatality Facts 2021 Teenagers..” Accessed May 23, 2023.
Insurance Institute for Highway Safety. “Teenagers by the numbers.” Accessed May 23, 2023.
National Highway Traffic Safety Administration. “Distracted Driving.” Accessed May 23, 2023.
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