Auto Insurance For New Drivers: What's The Cost?

Car insurance for first-time drivers can be expensive. The cost of insurance for a first-time driver varies widely depending on age, location, driving record, credit score, and the type of insured vehicle. On average, first-time drivers getting car insurance at age 18 pay $288 per month for minimum coverage, while a 30-year-old first-time driver pays an average of $93 per month for the same insurance coverage. New drivers are considered riskier to insure due to their lack of driving history, and insurance companies charge higher rates to offset the increased likelihood of claims.

How to save on new-driver car insurance

Car insurance for first-time drivers can be expensive. However, there are ways to save on premium costs. Here are some tips for new drivers to save money on car insurance:

Compare insurance companies

No two insurance companies will offer the same rates. Comparing car insurance quotes from multiple companies will help you find the cheapest insurance quotes for first-time drivers. You can also read comparisons between companies, such as Allstate vs Progressive or State Farm vs Geico, to help you decide.

Improve your credit score

Having a poor credit score can increase your insurance rates. Building a good credit score before getting car insurance can help you secure cheaper rates.

Look for discounts

Many insurance companies offer discounts for first-time drivers, including good student discounts, safe driving discounts, and discounts for having safety features in your car.

Adjust your car insurance coverage

You can save money by buying only the coverage you need. For example, personal injury protection (PIP) is optional in some states, and you can decline add-ons like roadside assistance coverage.

Try usage-based insurance

Usage-based insurance measures driving behaviour and mileage to set rates. This can be a good option for those who don't drive often or have good driving habits.

How much is insurance for a first-time driver?

The cost of insurance for first-time drivers varies depending on age, location, driving history, and the type of car. On average, first-time drivers getting insurance at age 18 pay $288 per month for minimum coverage, while a 30-year-old first-time driver pays an average of $93 per month for the same coverage.

The average cost of car insurance for a first-time driver who is 16 years old is $3,343 per year. However, this cost can vary depending on factors such as the driver's age, state, and insurance company. For example, a 16-year-old male driver with no previous insurance history can expect to pay an average of $1,105 for a six-month policy with USAA or $1,142 with Nationwide. GEICO also offers competitive rates for young drivers, with a monthly cost of $257 for a 16-year-old male.

For older first-time drivers, State Farm offers the cheapest rates. A minimum-coverage policy for an 18-year-old costs an average of $128 per month, while full coverage costs $270 per month. For a 30-year-old first-time driver, State Farm offers a minimum-coverage policy for $566 per year.

It is important to note that insurance companies consider not only teens with a new driver's license as "new drivers," but also older drivers who obtained their license later in life, people with a gap in driving or lapsed insurance coverage, and immigrants or foreign drivers.

To save money on car insurance, first-time drivers can consider the following strategies:

• Remain on their parents' policy: This can result in lower rates as the parents' insurance background, driving history, and credit scores are taken into account.
• Shop around and compare rates from different insurance companies.
• Select an inexpensive vehicle: Driving a luxury vehicle can result in higher insurance premiums, especially for new drivers.
• Opt for a higher deductible: This can lower your insurance premium, but it means paying more upfront if you file a claim.
• Look for discounts: Many insurance companies offer discounts for good students, safe drivers, occupation, and equipment (anti-theft devices).

By comparing rates, choosing the right coverage, and taking advantage of discounts, first-time drivers can find ways to reduce the cost of their car insurance.

Best car insurance for new drivers over 25

First-time drivers over 25 will be considered new drivers and will likely pay more for car insurance than more experienced drivers. However, they will pay less than younger new drivers. For example, an 18-year-old first-time driver pays an average of $288 per month for a minimum-coverage policy, while a 30-year-old first-time driver pays an average of $93 per month for the same coverage.

There are several insurance companies that offer affordable rates for drivers under 25. Here are some of the best options:

Farmers

Farmers is recommended by Insurify as the best option for cheap coverage for drivers under 25. They offer low average premiums and many discounts, such as:

• Good student discount
• Distant-student discount
• Multiple-vehicle driver discount
• Bundling auto and renters insurance discount
• Alternative fuel vehicle discount

Travelers

Travelers is recommended by Insurify as the best option for coverage options for drivers under 25. They offer a wide range of car insurance options and have a national network of local independent agents. They also offer various discounts, such as:

• Safe driver discount
• Good student discount
• Accident forgiveness
• Roadside assistance
• Rental car coverage

State Farm

State Farm is recommended by Insurify as the best option for discounts for drivers under 25. They offer many coverage options and various discounts, such as:

• Good student discount
• Safe driver discount
• Driver training program discount
• Multi-vehicle discount
• Bundling auto and renters insurance discount

GEICO

GEICO is one of the most affordable options for first-time drivers, with a six-month premium for a 16-year-old male averaging $1,545. They also offer various discounts, such as:

• Good student discount
• Company-created driver safety programs
• Discounts for completing driver training programs

USAA

USAA is another affordable option, with a six-month premium for a 16-year-old male averaging $1,105. However, it is only available for military members or their families. They offer various discounts, such as:

• Good student discount
• Discounts for completing a driver training program
• Safe Pilot program

Nationwide

Although Nationwide is not the cheapest option, with a six-month premium for a 16-year-old male at $1,142, they still offer competitive rates and some discounts, such as:

• Good student discount
• Accident forgiveness
• Roadside assistance
• SmartRide usage-based insurance program

To get the best rates, first-time drivers over 25 should compare quotes from multiple insurance companies and look for available discounts. They can also consider remaining on their parents' policy, if possible, as this can result in lower rates. Additionally, improving their credit score and choosing a higher deductible can help lower premiums.

How does age affect car insurance rates?

Age is one of the most important factors that insurance companies consider when determining car insurance quotes. Young people have less driving experience, so they are more likely to cause accidents compared to other age groups.

Drivers under the age of 25 tend to pay the highest car insurance rates. Rates start to increase again after age 60.

How Age Affects Car Insurance Rates

Insurance companies understand that insurance premiums for young drivers can be daunting, and there are a few ways to get cheaper auto insurance. For example, taking advantage of discounts is one way to help bring down premiums. Most insurance companies offer discounts such as good student and driver training discounts. The best way to ensure your rates remain low is by maintaining a clean driving record.

Car Insurance for Teen Drivers

Teen drivers are considered some of the riskiest to insure. Per mile driven, drivers aged 16 to 19 get into almost three times as many fatal car accidents as any other age group. Insurers frequently charge more to insure teen drivers to offset the higher costs associated with teen driving claims. A 16-year-old driver pays $613 for full coverage insurance, on average.

Car Insurance for Adult Drivers

The cost of auto insurance coverage generally begins to drop by the time a driver reaches their early 20s. By the age of 25, drivers might notice a significant reduction in their premiums. Throughout adulthood, provided that drivers have a history of safe driving and no insurance claims, premiums generally continue to drop as drivers gain more experience.

Car Insurance for Senior Drivers

Unfortunately, the downward trend of insurance premiums typically comes to an end as drivers reach their 70s. Aging-related factors like vision or hearing loss and slowed response time might make seniors more likely to get into accidents. However, while seniors may see their insurance premiums increase, they likely will not go back to paying the high rates of teen drivers, assuming their driving record is clean.

How to save on new-driver car insurance

New drivers typically pay more for car insurance than experienced drivers. However, there are ways to keep the costs down. Here are some strategies to save on car insurance for new drivers:

Compare insurance companies

Different insurance companies will offer different prices for the same coverage. Comparing quotes from multiple companies will help you find the cheapest insurance for new drivers. It's worth checking out smaller, regional companies as well as the bigger ones. An independent insurance agent can help with this process.

Improve your credit score

In most states, a poor credit score will increase your insurance rates. So, building a good credit score before getting car insurance is a great way to save money.

Look for new driver discounts

Many car insurance companies offer discounts for young and student drivers. For example, you can get discounts for being a good student (usually defined as having at least a B average), taking a defensive driving course, or being part of certain professional or alumni groups.

Adjust your coverage

You can save money by only buying the coverage you need. For example, in some states, personal injury protection is optional, and you can decline add-ons like roadside assistance coverage. You can also opt for a higher deductible, which will lower your premium, but remember that this means paying more upfront if you do need to file a claim.

Try usage-based insurance

Also known as pay-per-mile insurance, usage-based insurance is often cheaper for new drivers, especially those who don't drive very often. However, it may not be available in all states, and it could increase rates for those with poor driving habits or long commutes.

Frequently asked questions