New Drivers: Finding Affordable Auto Insurance

New drivers often face higher insurance premiums due to their lack of driving experience. While rates vary depending on age, location, and other factors, Nationwide, Geico, and State Farm are some of the cheapest options for new drivers. Young drivers can also save money by joining a family insurance policy or taking advantage of various discounts offered by insurance companies.

Cheapest full coverage car insurance for new drivers

New drivers pay significantly more for car insurance than experienced drivers, but some companies offer great prices and comprehensive coverage.

The cheapest full-coverage car insurance for new drivers is provided by State Farm, with rates of around $276 per month for young first-time drivers. This is about half the average monthly rate of $544.

For 21-year-old and under new drivers, Nationwide tends to offer the most affordable rates. For those who have just reached their early 20s but are still under 26, GEICO may be the most cost-effective choice.

For 25-year-old new drivers, Travelers offers the lowest rates at $166 per month.

How to Get Cheaper Insurance as a New Driver

• Get on a family policy: Young drivers under 25 usually face higher insurance costs due to increased accident risks. To cut costs, they can join a family insurance policy.
• Take advantage of discounts: Car insurance companies often provide the option to stack multiple discounts. These include student discounts, good driver discounts, and safety feature discounts.
• Drive a less expensive car: Your car's value directly influences insurance premiums. Insurers charge more for pricier cars because they expect higher expenses if the car is damaged, stolen, or involved in an accident.
• Improve your credit score: Insurance companies often use credit-based insurance scores to set rates. Improving your credit score can help lower your insurance premium.

Cheapest liability-only car insurance for new drivers

Liability-only car insurance is the cheapest coverage you can buy, but it only provides the minimum coverage required by state law. Liability insurance covers the cost of property damage and personal injuries to another party if you're found at fault for a car accident. However, it doesn't cover damages to your own vehicle in accidents you cause or damage from theft, vandalism, or environmental causes.

According to rates received in June 2024, Farm Bureau, USAA, Auto-Owners, and Country Financial are the most affordable providers of liability car insurance. Farm Bureau offers the cheapest liability car insurance for most drivers in 2024, with rates of $31 per month or $368 per year on average. USAA is the second-cheapest option, with an average monthly rate of $39 or $471 per year.

The cost of liability-only car insurance varies depending on the state. Wyoming has the lowest average cost at $25 per month or $303 per year, while New York has the highest at $185 per month or $2,221 per year.

When shopping for liability-only car insurance, it's recommended to get quotes from multiple providers to find the best rates. Additionally, consider factors that can affect your car insurance rates, such as your location, age, driving record, credit history, gender, marital status, and vehicle details.

While liability-only car insurance is the most affordable option, it's important to consider the risks associated with limited coverage. In the event of an accident, you may face high out-of-pocket costs for repairs and medical bills. Therefore, it's crucial to carefully evaluate your needs and choose a reputable insurance company that offers the coverage options you require.

How to save on new-driver car insurance

New drivers typically face higher insurance rates due to their lack of driving experience. However, there are ways to reduce these costs. Here are some tips to secure cheaper insurance as a new driver:

• Compare Insurance Companies: No two insurance companies will offer the same price. Taking the time to compare quotes from multiple providers will give you a baseline idea of what to expect.
• Improve Your Credit Score: Building good credit before getting behind the wheel can help you secure cheaper insurance as a new driver. In most states, a poor credit score will lead to higher car insurance premiums.
• Look for New Driver Discounts: Many insurance companies offer discounts for young and new drivers. For example, Geico offers a teen driver discount, while Erie Insurance provides a young driver discount.
• Adjust Your Car Insurance Coverage: Opting for a higher deductible usually leads to lower premiums, but it does mean paying more upfront if you file an insurance claim. You can also drop coverage you don't need, such as collision insurance and comprehensive coverage for older vehicles.
• Try Usage-Based Insurance: Also known as pay-per-mile insurance, usage-based car insurance coverage measures driving behaviour and mileage and uses this data to set rates. According to the NAIC, usage-based insurance policies usually end up costing customers less than traditional auto insurance.

Cheapest car insurance for new drivers over 25

New drivers over 25 can expect to pay less for car insurance than younger drivers, but rates can still vary depending on age, gender, location, vehicle, driving history, and credit score.

The cheapest car insurance companies for drivers over 25 include:

• State Farm
• Allstate
• Geico
• USAA
• Travelers
• Progressive
• Liberty Mutual
• Farmers
• Auto-Owners
• COUNTRY Financial

State Farm

State Farm offers the cheapest full-coverage car insurance for new drivers over 25, costing $117 per month. State Farm also offers savings of up to 25% on premiums for students with good grades.

Allstate

Allstate offers the cheapest minimum-coverage car insurance for new drivers over 25, costing $33 per month.

Geico

Geico is one of the cheapest and best car insurance companies for new drivers, with rates lower than the national average. Geico also offers good student discounts.

USAA

USAA is only available to current and former military members and their families. It offers some of the lowest rates for new drivers, with monthly rates of $48 for minimum coverage and $166 for full coverage.

Travelers

Travelers is another affordable option for new drivers, with rates of $166 per month for full coverage. They also offer good student discounts and accident forgiveness.

Progressive

Progressive is known for offering reasonable rates to high-risk drivers, including younger, less experienced drivers. They also offer good student and student away-from-home discounts.

Liberty Mutual

Liberty Mutual is another option for new drivers over 25, with rates comparable to Progressive.

Farmers

Farmers is recommended by Insurify as the best option for cheap coverage, with low average premiums. They also offer various discounts, including good student and distant-student discounts.

Auto-Owners

Auto-Owners Insurance is one of the cheapest providers of car insurance for new drivers, with rates under $70 per month for minimum coverage.

COUNTRY Financial

COUNTRY Financial is another affordable option for drivers under 25, with liability rates lower than the $127-per-month average.

Tips for Saving on Car Insurance

• Compare quotes from multiple insurance companies.
• Stay on your parents' policy as long as possible.
• Choose a higher deductible.
• Drive safely and take a defensive driving course.
• Consider driving an older, more reliable car.

Cheapest car insurance for young adults

Young drivers often face higher insurance premiums due to their lack of driving experience, with young male drivers typically incurring the most expensive rates. However, there are ways to find cheap car insurance for young adults.

Cheapest Insurance for 21-Year-Olds

USAA and Geico are the cheapest insurance providers for 21-year-olds, with monthly rates of $218 and $262, respectively.

Cheapest Insurance for 25-Year-Olds

For 25-year-olds, Travelers offers the lowest rates at $166 per month, followed by Geico and USAA.

Cheapest Insurance for New Adult Drivers

Nationwide and Allstate offer the most affordable insurance options for newly licensed adult drivers, with annual premiums of $2,138 and $2,790, respectively.

Tips for Finding Cheaper Insurance as a New Driver

• Get on a family policy: Young drivers under 25 usually face higher insurance costs, so it's more affordable to join a family insurance policy.
• Take advantage of discounts: Car insurance companies often provide the option to stack multiple discounts, such as good student discounts, safe driver discounts, and safety feature discounts.
• Drive a less expensive car: Your car's value directly influences insurance premiums. Insurers charge more for pricier cars because they expect higher expenses if the car is damaged, stolen, or involved in an accident.
• Improve your credit score: Insurance companies often use credit-based insurance scores to set rates. Improving your credit score can help lower your insurance premiums.

Frequently asked questions