Auto Insurance For Young Adults

Yes, 18-year-olds can get their own car insurance policy, but it is often very expensive. The average cost of full-coverage car insurance for 18-year-olds is $458 per month, but this varies depending on factors such as gender, location, and insurance company. For example, the average cost for an 18-year-old male on his own policy is $5,565 per year, while the average cost for an 18-year-old female is $4,918. It is usually much cheaper for 18-year-olds to be added to their parents' policy, which can save them up to 62%. However, this may not always be an option, especially if the parents have a bad driving history or poor credit score.

Cheapest car insurance companies for 18-year-olds

Yes, 18-year-olds can get their own car insurance policy, but it is incredibly expensive. The best way to save money on car insurance for 18-year-olds is to add them to their parents' policy. Here are some of the cheapest car insurance companies for 18-year-olds:

• USAA: Available only to members of the military, veterans, and their immediate families. USAA is the cheapest option for adding an 18-year-old to a parent's policy and for a parent's policy with an 18-year-old driver included.
• Erie: The second-cheapest option for adding an 18-year-old to a parent's policy, and the cheapest for an 18-year-old's individual policy.
• Geico: The third-cheapest option for adding an 18-year-old to a parent's policy, and the second-cheapest for an 18-year-old's individual policy.
• State Farm: The cheapest widely available option for an 18-year-old's individual policy.
• Country Financial: The cheapest option for an 18-year-old's individual policy, but it is only available in 19 states.
• Nationwide: The second-cheapest option for an 18-year-old's individual policy.
• Travelers: The cheapest option for full-coverage individual policies.
• Auto-Owners: One of the cheapest options for full-coverage individual policies.
• New Jersey Manufacturers: One of the cheapest options for adding an 18-year-old female to a parent's policy.
• Island: One of the cheapest options for adding an 18-year-old male to a parent's policy.

Average cost of car insurance for 18-year-olds

The average cost of car insurance for 18-year-olds varies depending on several factors, including gender, location, and whether they are added to a parent's policy or have their own.

According to QuoteWizard, the average cost of car insurance for 18-year-olds is $266 per month for the minimum amount of coverage required by their state. For full-coverage car insurance, 18-year-olds can expect to pay an average of $414 per month. Male drivers will likely pay more than female drivers, as young men generally have higher insurance premiums than young women.

The Zebra reports that the typical insurance rate for an 18-year-old driver is $356 per month, or $2,136 per six-month policy. This is because insurance companies consider young drivers to be "high-risk" due to their lack of experience.

Forbes Advisor's analysis found that the average cost of car insurance for an 18-year-old on their own policy is $6,147 per year, or $512 per month. This figure is supported by Bankrate, which reports that the average full-coverage policy for 18-year-olds stands at $6,488 annually.

ValuePenguin reports that the average cost of full-coverage car insurance for 18-year-olds is $458 per month. The cheapest companies for 18-year-old drivers are Country Financial, Erie, and State Farm.

QuoteWizard reports that it costs an average of $2,250 per year to add an 18-year-old driver to a parent's car insurance policy. This can result in significant savings compared to the teen purchasing a separate policy.

Forbes Advisor's analysis found that it costs an average of $2,103 per year to add an 18-year-old to a parent's car insurance policy. Bankrate reports that the average cost of full coverage for an 18-year-old on their parent's policy is $4,258 per year.

Cheapest Car Insurance Companies for 18-Year-Olds

State Farm is the cheapest car insurance company for 18-year-old drivers, according to QuoteWizard, with an average rate of $184 per month. Mercury and Erie are also affordable options, with average monthly rates of $135 and $137, respectively. USAA is a good choice for military members or their families, offering coverage for $120 per month.

The Zebra reports that USAA and GEICO have the cheapest auto insurance rates for 18-year-old drivers. Travelers, Geico, State Farm, Erie Insurance, and USAA are also recommended by MarketWatch as affordable options.

Discounts to help 18-year-olds save on car insurance

Car insurance for 18-year-olds is expensive, as they are considered high-risk drivers. However, there are several discounts available that can help lower the cost of insurance for this age group. Here are some of the most common discounts:

• Good Student Discount: This is a common discount offered by many insurance companies. To qualify, students need to be full-time students with good grades, typically maintaining a B average or higher. The definition of a "good student" may vary between insurers, but it generally includes being in the upper 20% of the class or making the Dean's List or Honor Roll. This discount can provide savings of around 4% on average.
• Student Away from Home Discount: If an 18-year-old student attends a school located more than 100 miles from home and leaves their car at home, they may be eligible for this discount. This discount recognises that the student will be driving less and therefore presents a lower risk. This discount can provide an average savings of 8%.
• Driver Training/Defensive Driving Course Discount: Some insurance companies offer discounts for drivers who have completed an accredited defensive driving or driver training course. This demonstrates a commitment to safe driving and can help lower insurance costs.
• Telematics/Usage-Based Programs: Installing a telematics device or using a telematics-based app can monitor driving habits and may qualify drivers for a discount. These programs track factors such as rate of braking, average speed, and driving frequency. However, it's important to note that poor driving habits detected by these programs may also lead to increased rates.
• Multiple Car Discount: If an 18-year-old is added to an existing policy with multiple vehicles, some insurance companies offer a discount for insuring more than one car.

It's important to note that the availability and specifics of these discounts may vary by insurance company and location. It's always a good idea to shop around, compare quotes, and ask about available discounts to find the best rates for 18-year-old drivers.

Pros and cons of getting your own insurance vs staying on your parents' plan

Staying on your parents' insurance policy as a young driver has its advantages and disadvantages. Here are some pros and cons of getting your own insurance versus staying on your parents' plan:

Pros of Staying on Your Parents' Plan:

• Affordability: If you are under 25 and have a clean driving record, staying on your parents' policy will likely be much cheaper than purchasing your own insurance. The average insurance for teen drivers is $691 per month or $8,293 per year, while the average rates for American drivers are around $84 per month or $1,009 annually.
• Establishing History: Staying on your parents' insurance can help you establish a coverage history, which can lead to discounted rates later on if you maintain the same insurer.
• Access to their Insurance Agent: Your parents likely have an experienced insurance agent who can help secure and maintain the best rates for you.

Cons of Staying on Your Parents' Plan:

• Higher Premiums for Parents: Adding a young driver to a policy increases premiums. This can be a significant increase, especially for teens, who are considered high-risk due to their lack of driving experience.
• Limited to Living at Home: Once you move out of your parents' house, you will likely need to get your own insurance policy. This is because car insurance coverage is tied to the vehicle owner's address. So, if you have a different permanent address, a separate policy is usually required.
• Vehicle Ownership: If you own a car, you may need to purchase your own insurance policy or have it listed on your parents' policy. This varies by state and insurer, but generally, the policyholder for a vehicle needs to be the person named on the title.

Pros of Getting Your Own Insurance:

• Independence: Having your own insurance policy gives you independence and autonomy, especially if you are no longer living with your parents or have your own vehicle.
• No Impact on Parents' Premiums: By getting your own insurance, you won't impact your parents' premiums if you are involved in an accident or receive any traffic violations.
• Building Your Own History: You can start building your own insurance history and work towards lower premiums over time by maintaining a clean driving record and safe driving practices.

Cons of Getting Your Own Insurance:

• Cost: The biggest drawback of getting your own insurance as a young driver is the cost. Premiums are typically much higher for young drivers, especially those under 25, due to their higher risk profile.
• Limited Discount Options: Staying on your parents' plan often provides access to various discounts, such as good student discounts, safe driving discounts, and multi-vehicle discounts, which may not be available to you on your own.

In conclusion, staying on your parents' insurance plan can offer significant cost savings and provide a foundation for building a positive insurance history. However, getting your own insurance gives you independence and ensures your parents' premiums are not impacted by your driving record. The decision depends on various factors, including your age, living situation, vehicle ownership, and financial considerations.

How to get the best insurance for 18-year-olds

Yes, 18-year-olds can get their own car insurance policy. However, it is usually much cheaper to be added to a parent's or guardian's policy.

Shop Around

Compare car insurance quotes from multiple insurance companies. Prices can vary by thousands of dollars per year, so it is important to shop around to find the best rates and coverage.

Stay on Your Parents' Policy

If possible, stay on your parents' or guardians' policy. This is usually much cheaper than having your own separate policy. The average cost of adding an 18-year-old to a parent's car insurance policy is $271 per month for full coverage, compared to an average of $458 per month for an 18-year-old's own policy.

Look for Discounts

Insurance companies offer many discounts that you may be eligible for. For example, if you are a high school or college student with good grades (usually defined as a B average or 3.0 GPA), you can get a good student discount.

College students who leave their cars at their parents' home and attend a university more than 100 miles away can often get an away-from-home student discount, along with a low-mileage discount.

If you are financially independent from your parents and live separately from them, you can save on your auto insurance policy by bundling it with your renters or homeowners insurance.

Drive an Affordable Car

Expensive cars cost more to repair and insure. Safer cars like SUVs and sedans are usually cheaper to insure than sports cars.

Increase Your Deductible

You can lower your insurance rate by choosing a higher deductible. However, this means you will pay more out of pocket if you need to file a claim.

Sign Up for a Safe Driver Program

By sharing your driving data with your auto insurance company via a plug-in tracking device or app, you can prove that you're a safe driver worthy of cheaper rates. However, some programs will raise your rates if they detect any bad driving habits.

Lower Your Coverage Limits

While it's generally recommended that young drivers buy a full-coverage policy, a minimum coverage policy costs much less. Minimum coverage might be a good option if you have an older car that's worth less than $10,000.

Frequently asked questions