Paul Sanchez
Car insurance rates are influenced by several factors, including age, gender, driving experience, and location. While rates generally decrease as drivers age, there are specific milestones, such as turning 18, that can result in notable changes in insurance premiums. Younger drivers, particularly those under 25, are often considered high-risk due to their higher likelihood of accidents and tend to pay higher insurance rates. As they gain experience and demonstrate safe driving behaviour, their insurance rates may decrease. For individuals aged 18, understanding how these factors interact can help optimize their insurance plans and costs.
| Characteristics | Values |
|---|---|
| Cheapest car insurance rates for 18-year-olds | Start at $50 per month |
| Most affordable companies | Concord Group, Auto-Owners and State Farm |
| Average car insurance cost for an 18-year-old male | $557 per month for full coverage |
| Average car insurance cost for an 18-year-old female | $508 per month for full coverage |
| Cheapest minimum liability car insurance for 18-year-olds | State Farm at around $1,356 per year |
| Cheapest full coverage auto insurance provider for 18-year-old drivers | Concord Group at $1,464 per year |
| Average car insurance costs by state range | $83 to $552 per month |
| Average car insurance costs for 18-year-olds | $1,776 for minimum coverage and $3,606 for full coverage |
| Average car insurance cost for an 18-year-old | $530 per month for full coverage |
| Average cost of car insurance for 25-year-olds | $815 per year for minimum coverage |
| Average cost of car insurance for 60-year-olds | $158 per month for full coverage |
| Average cost of car insurance for 75-year-olds | 19% more than for 60-year-olds |
| Average reduction in car insurance rates between 18 and 19 years old | 20-25% |
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What You'll Learn
Car insurance rates for 18-year-olds
The cost of car insurance is generally lower for 18-year-olds than younger teen drivers. An 18-year-old driver has more driving experience than a newly licensed 16 or 17-year-old, and this is reflected in the rates. However, if you are a new driver at 18, you will likely pay more than someone who got their license at 16.
There are ways to reduce insurance costs for 18-year-olds. One way is to share a policy with your parents, which is usually much cheaper than having a separate policy. Another way is to take advantage of discounts offered by insurance companies, such as good student discounts for high school and college students with good grades, usage-based discounts, and discounts for safe driving. Additionally, insurance rates can vary significantly depending on the company and location, so it is essential to compare quotes from multiple providers to find the best rates.
Car insurance rates generally decrease as individuals age and gain driving experience. The most significant decreases occur between ages 18 and 19, with rates dropping by about 20-25% on average. As drivers turn 25, rates stabilize, and premiums are about 65-70% lower than at age 16. However, individual rates may vary based on personal factors, such as driving record and credit score.
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Discounts for students
While insurance rates typically decrease as individuals age and gain driving experience, younger drivers are considered high-risk and are therefore more expensive to insure. However, there are several discounts available for students that can help offset these costs.
Good Student Discount
Several insurance companies, including GEICO, Farmers, and Progressive, offer good student discounts for full-time students with a B average or above (a 3.0 GPA or higher). This discount can be coupled with a good driver discount, leading to significant savings on car insurance.
Distant Student Discount
Insurance companies like Progressive offer distant student discounts for those who attend a university more than 100 miles away from home and do not have a car at school.
Teen Driver Discount
Progressive also offers a teen driver discount for individuals who are 18 years old or younger.
Away-from-Home Student Discount
Students who leave their cars at their parents' home during the academic year may qualify for an away-from-home student discount, especially if they attend a university that is over 100 miles away.
Low-Mileage Discount
Students who do not live with their parents can often save on their auto insurance policy by bundling it with their renters or homeowners insurance.
In addition to these discounts, students can also save on car insurance by choosing a higher deductible, driving an affordable and safe car, and comparing rates from multiple insurance companies.
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Gender-based rates
While age is a significant factor in determining insurance rates, gender also plays a role, especially for young drivers. Teenagers tend to have the highest insurance rates, with 16-year-olds paying the highest monthly premiums. Within this age group, male drivers face higher premiums than females due to higher accident frequency and more severe crashes. For instance, in 2025, a 16-year-old male driver paid $495 more per year than a female of the same age. This gap narrows as drivers age, with the difference decreasing to $33 per year after a driver turns 25.
The gender gap in insurance rates is influenced by various factors, including driving experience and risk factors. Men are generally considered riskier to insure due to higher mileage, riskier driving behaviours, and a higher likelihood of fatalities in crashes. These factors contribute to higher insurance rates for young men compared to their female counterparts. However, as drivers age and gain more experience, the gender gap narrows, with rates becoming nearly equal around age 30 or 35.
It is worth noting that not all states in the US allow insurers to set rates based on gender. States like California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania have banned the use of gender as a pricing factor in auto insurance. In these states, insurance rates are determined primarily by age, driving experience, and other factors, rather than gender.
To find the most affordable insurance rates, it is recommended to shop around and compare quotes from multiple insurance companies. Additionally, maintaining a clean driving record, improving credit scores, and taking advantage of discounts, such as good student discounts, can help lower insurance costs, regardless of gender.
While gender-based rates exist in the insurance industry, the impact of gender on insurance rates decreases as individuals age and gain more driving experience. The combination of age and gender can result in significant disparities in insurance rates, especially for young drivers. However, as individuals mature and their risk profiles improve, the differences in rates between genders become less pronounced over time.
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Rates for 18-year-olds with parents' policies
An 18-year-old can buy their own car insurance policy, but it is usually much cheaper to share a policy with their parents. While parents typically see their rates go up when they add a teen driver to their policy, it is still more cost-effective than the teen purchasing their own separate policy. The exact cost of adding an 18-year-old to a parent's policy depends on several factors, including the driver's gender, location, vehicle, and insurance company.
According to CarInsurance.com, the average annual rate for adding an 18-year-old to a parent's policy is $3,478. However, this rate varies depending on the driver's gender, with males paying $557 per month ($6,684 per year) and females paying $508 per month ($6,096 per year) on average. State Farm is typically the cheapest option for 18-year-olds, with monthly rates of $381 for full coverage.
There are several ways for parents and teens to save money on car insurance. One way is to look for discounts, such as the good student discount for teens with a minimum 3.0 GPA or B average. College students who leave their cars at their parents' home during the academic year may also qualify for an away-from-home student discount if they attend a university more than 100 miles away. Additionally, safer cars like SUVs and sedans are usually cheaper to insure than sports cars. Increasing the deductible can also lower the insurance rate.
It is worth noting that car insurance rates generally decrease as drivers age and gain more experience. The most significant drop in rates typically occurs between the ages of 18 and 19, with rates decreasing by about 20-25% on average. As such, it may be beneficial for 18-year-olds to remain on their parents' policy until they turn 19, as they can take advantage of the lower rates offered by being part of a family plan while also building up their driving experience, which will lead to lower premiums in the future.
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Cheapest insurance companies for 18-year-olds
Insurance rates for 18-year-olds can be very high, but there are ways to get cheaper insurance. The best way to get a cheap insurance quote is to shop around and compare quotes from multiple insurance companies.
According to ValuePenguin, State Farm is the cheapest major company for 18-year-olds, at $381 per month for full coverage. However, The Zebra and MoneyGeek claim that USAA, American Family, and GEICO offer the lowest rates, with USAA and American Family costing $316 per month and GEICO $318 per month.
Discounts
There are also many discounts that insurance companies offer to help you save money. For example, if you are a student with good grades (a B average or 3.0 GPA or better), you can get a good student discount. If you are a college student who leaves their car at their parents' home during the academic year, you can get an away-from-home student discount. This is usually available if you attend a university more than 100 miles away from home. You may also qualify for a low-mileage discount.
Share a Policy
Another way to save money is to share a policy with your parents. This is usually much cheaper than having your own separate policy, although it will increase your parents' rates.
Drive a Safe Car
The type of car you drive can also affect your insurance rates. Expensive cars cost more to repair and are therefore more costly to insure. Safer cars like SUVs and sedans are usually cheaper to insure than sports cars.
Increase Your Deductible
You can also lower your insurance rate by choosing a higher deductible.
Improve Your Credit Score
Improving your credit score can also save you money on your insurance. Moving your credit score from "poor" (300-579) to "very good" (740-799) can save you $100 per month on average.
Drive Safely
Finally, driving safely and only making a claim when necessary can help improve your insurance rate.
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Frequently asked questions
No, insurance rates are highest for those under 25. However, rates begin to decrease as you get older, with the most significant decreases happening in your late teens and early 20s.
The average insurance rate for 18-year-olds is $530 per month for full coverage. The average cost of insurance for an 18-year-old male is 10% more expensive than for an 18-year-old female.
The best way to get cheaper insurance is to stay on your parents' policy, as it costs 62% less to join their policy than to buy your own coverage. You can also look for discounts aimed at teens, such as good student discounts.
You should check for lower insurance rates at least once a year, or after major life changes such as turning 25, moving, buying a new car, or improving your credit score.
