Best Auto Insurance for Young Adults (2024)

Teenage drivers are more likely to be involved in collisions and accidents, making them riskier to insure. This is why auto insurance rates for teen drivers tend to rank highest among all motorists. The higher insurance costs can also create a financial burden for younger vehicle operators and owners.

Young adults typically pay more than average for full coverage auto insurance across all drivers in the U.S. Parents looking to add a teen or young driver can expect their monthly rates to increase by at least $150 or more.

But teens who opt to go it alone and open their own policy can expect to pay the most. Fortunately, there are steps you can take to simplify and possibly even lower the cost of car insurance for teens. 

This car insurance guide for teens and young adult drivers compares types of coverage, discounts, and companies, including picks for the best insurance companies, so that you can find the most affordable rates for young drivers. 

Who offers the best car insurance for teens? 

Our rate estimates show that USAA insurance, Geico insurance, and State Farm insurance frequently offer affordable young adult car insurance. 

When choosing between one of these four companies, you can be sure that you’ll get excellent coverage because each has strong financial ratings and rank high in customer service.

A lesser-known car insurance company, Erie insurance, also offers competitive rates. However, it’s only available in 12 U.S. states, mostly from Illinois and Wisconsin to the northeast.

How much does teen car insurance cost?

For young drivers aged 18-25, the average price for full coverage car insurance is just shy of $500/month. While these prices are quite high, younger drivers can opt for liability-only coverage for around $200/month.

It’s not all bad news. By the time a young driver with a clean record and no DUIs reaches the age of 25, their auto insurance may drop by as much as 75%. You can also get cheaper teen auto insurance by dropping coverages you don’t need. 

For example, liability-only insurance comes with the lowest rates. Owning an older car with high mileage intended for a teen might not need comprehensive car insurance or collision car insurance coverage, saving teen drivers on their monthly rates.

How are rates for young drivers determined? 

Because they lack driving experience and have the propensity to become distracted easily, teens and young drivers are more likely to file claims against auto insurance companies than other motorists. As a result, companies view young drivers — generally anyone under the age of 25 — as high-risk drivers. If you fall into this category, make sure to compare rates to find the best auto insurance companies for high-risk drivers.

The good news is that insurance costs usually decrease as drivers get older, and you can earn discounts by taking a driving course and getting good grades.

Cheapest Car Insurance Companies for Teens and Young Adults 

While car insurance prices vary by state and age, it typically decreases as drivers get older and improve their credit scores. 

This table shows how car insurance rates vary by age with the most popular companies in the country:

Average Full Coverage Monthly Car Insurance Rates by Age, Gender and Marital Status

Geico and State Farm offer the cheapest teen car insurance across the country, but your insurance rates are impacted by more than just age. 

Let’s take a look at other factors that affect teen car insurance now.

Read more:

• Average Car Insurance Cost by Age 
• Best Alabama Car Insurance
• Best Alaska Car Insurance
• Best Arkansas Car Insurance
• Best Tennessee Car Insurance

Cheapest Teen Car Insurance Rates By State

Every state is different, and some tend to be more expensive than others, regardless of driver age. For instance, not all states allow age, gender, or credit score to be factored in when creating an auto insurance policy.

Use the table below to compare car insurance by state for teens and young drivers:

U.S. Monthly Annual Comprehensive Auto Insurance Rates by State

The state with the cheapest young adult auto insurance is Hawaii due to age being disallowed from the underwriting procedure by state law.

Cheapest Full Coverage Car Insurance for Teens

Overall, Erie, Geico, and State Farm offer the most competitive rates for new drivers who want full coverage. (For more information, read our “Best California Car Insurance for New Drivers“).

Full coverage car insurance includes collision and comprehensive coverage on top of liability, leading to higher rates. Learn more about the different types of car insurance coverage.

Depending on several variables, insurance costs can differ significantly from person to person. Your driving history, ZIP code, credit score, and the make and model of the car you drive will also influence your rates, so shop around with multiple companies to find the most affordable coverage near you.

Cheapest Car Insurance for Young Adults Under 30

Geico and State Farm offer the cheapest auto insurance for teens and young adults, with coverage available in all 50 states. 

Erie is the most affordable auto insurance for young adults in the U.S. However, it’s only available in 12 states. Next is USAA, though you have to be a military serviceperson, veteran, or family member to qualify for coverage.

Cheapest Car Insurance for Adding a Newly-Licensed Teen

Even with the high costs associated with teen drivers, shopping around can significantly reduce costs.

Erie, USAA, and Geico consistently deliver cheap auto insurance for 16-year-old drivers. Each also offers competitive car insurance rates for drivers under 21.

It’s also good to remember that AARP offers an affordable way to add a young driver to an existing auto insurance policyholder. Learn more about AARP car insurance.

Cheapest Car Insurance for Teenagers Who Want a Separate Policy

The top five major auto insurance companies for young drivers on their own separate policies are USAA, Geico, State Farm, Nationwide, and Safeco.

If the car is in your name and you are listed as the sole owner, your parents’ auto insurance cannot cover you. If your parents aren’t listed as owners, they can’t insure your car. It is a good idea to request quotes from several insurance companies in advance if you are considering purchasing your own vehicle. 

When you purchase a policy on your own, your parents’ insurance company might not give you the best rates. That’s why it’s always a good idea to shop around.

The Best Military Car Insurance Rates for Teens

USAA is typically the best deal in car insurance rates for young adults serving in the military. 

While other major insurance companies may offer a nominal military discount, USAA consistently has the best price and understands a soldier’s needs during long-term deployments.

How to Get Cheap Car Insurance for Teens and Young Drivers

Even despite seemingly insurmountable financial odds, there are still ways for young drivers to save on their auto insurance policy:

Ask for Teen Car Insurance Discounts

The easiest way to save money on teen auto insurance is to ask about discounts for new drivers. In addition, many auto insurance companies provide good student discounts to teens who maintain a grade point average of at least B or higher.

There are quite a few car insurance discounts available, including:

• Defensive driving course discount
• Telematics and driver monitoring apps, like Geico DriveEasy
• Membership discounts for affinity groups, like sororities, fraternities, and Honors Societies

College students can also save money by leaving their cars at home while they’re on campus with a student-away-at-school discount. Ask your insurance agents about other discounts your young driver may qualify for.

Read more:

• Good Student Car Insurance Discount
• Best Car Insurance for Students

Compare Teen Car Insurance Quotes

You can never be sure which insurance provider will offer you the best deal. For this reason, before purchasing a policy, you should always shop around and compare quotes from different providers. 

Using a comparison website like ours, where you only need to fill out one form to view multiple quotes, as opposed to filling out a form on each provider’s website, you can accomplish this in a few minutes. 

This way, you can compare prices, special offers, and coverages in one place.

Add Teens to an Existing Policy

 Adding teen drivers to your current auto insurance plan usually costs less than buying an individual policy. Families may be eligible for a multi-vehicle if you insure multiple vehicles with the same company. 

You should still do the math in this case and shop around to see if any other insurers will give you a better deal than your current provider.

Drive an Inexpensive Vehicle

Sports, luxury, and exotic foreign cars tend to cost the most to insure for a driver of any age. Many drivers might not even be aware that the Mazda 3 is counted as a sports car by auto insurance companies in nearly every state. 

Read more: Best Mazda Car Insurance Quotes

Always check rates for a potential vehicle before purchase to see if you can afford the monthly insurance payment.

You can save money by placing the teen driver in the least expensive vehicle. However, for this arrangement to function, your teen must only operate vehicles for which they have valid insurance.

Choose a Higher Deductible

A higher deductible can result in higher out-of-pocket expenses after an accident. Still, if your teen drives defensively and responsibly, you might want to think about making this change. 

It can be much simpler to fit a new driver’s policy into your monthly budget when you raise your deductible because doing so lowers your monthly premium. If you ever need to pay the deductible amount, consider setting aside some of those savings.

How to Lower Teen Car Insurance Rates

Choosing a higher deductible and maintaining a good driving record are just a few ways teens can lower their insurance rates. 

Keep reading for more tips on how to get cheap auto insurance rates for teens and young drivers.

Pick the Right Deductible

Car insurance deductibles for collision and comprehensive insurance often range between $250 and $1,000. This is the amount drivers agree to pay before insurance coverage kicks in, and lower deductibles usually result in higher monthly rates.

For more expensive cars, raising your deductible might save you money if you trust your teen driver to avoid accidents. For older cars, a higher deductible and an unforeseen accident might be the excuse you were looking for to buy a new car anyway.

Maintain a Clean Driving Record 

A clean record really pays off once a young driver enters their early 20s. However, an at-fault accident or a DUI does just the opposite, often skyrocketing rates. 

If you’re shopping for bad driving record car insurance, expect your rates to be even higher.

Pay Bills on Time

In many states, insurance company underwriters can use your credit history and credit score when formulating your auto insurance policy. Therefore, ensuring you never fall behind on bills could also keep your car insurance rates from spiking.

Avoid Traffic Tickets 

There’s a fine art to avoiding traffic citations in an increasingly lawless world where people tailgate and drive at unsafe speeds and distances from your vehicle, especially when you’re following posted speed limits. 

Still, you’re potentially asking for a traffic ticket if you’re going any more than 10 mph over the limit in most areas on city streets and over 15 mph on highways. Younger drivers should grow accustomed to driving in the far right lane and avoiding the fast or passing lane.

Compare Teen Car Insurance Quotes Online

Your best bet is to shop around for the best price. Then, see if you can add the young driver to the parent’s policy to get even lower rates. 

Start comparing car insurance quotes from local companies now with our free comparison tool below. Enter your ZIP code to see how much teen car insurance costs in your state.

Case Studies: Best Auto Insurance for Young Adults

Case Study 1: John – A 20-Year-Old College Student

John is a 20-year-old college student who recently obtained his driver’s license. He is looking for affordable auto insurance that offers good coverage. After conducting extensive research and comparing quotes from various insurance companies, John found that Geico and State Farm offered the best auto insurance rates for young adults like himself.

These companies provided him with the coverage he needed at a reasonable price.

Case Study 2: Sarah – A 23-Year-Old Recent Graduate

Sarah is a 23-year-old recent graduate who just started her first job. She wants to find auto insurance that fits her budget while providing comprehensive coverage. Sarah compared quotes from multiple insurance companies and discovered that USAA, Geico, and State Farm consistently offered affordable rates for young adults.

After carefully reviewing the policies and considering her specific needs, Sarah chose USAA as her auto insurance provider.

Case Study 3: Alex – An 18-Year-Old High School Student

Alex is an 18-year-old high school student who wants to purchase his own car and get insurance. Since he will be the primary policyholder, he needs to find an insurance company that offers competitive rates for young drivers on separate policies.

After obtaining quotes from multiple insurers, Alex found that USAA, Geico, State Farm, Nationwide, and Safeco were the top choices for young drivers like him. Alex decided to go with Geico due to their affordable rates and positive customer reviews.

Case Study 4: Emma – A 19-Year-Old Military Serviceperson

Emma is a 19-year-old serving in the military who needs auto insurance that caters to her unique circumstances. After evaluating different insurance options, Emma found that USAA consistently offered the best car insurance rates for young adults in the military.

With their understanding of the specific needs of military personnel and their competitive pricing, USAA proved to be the best choice for Emma.

Car Insurance Guide for Teens and Young Adults: Conclusion

Auto insurance is necessary for teens who want to get behind the wheel, but you might have some difficulty finding affordable rates. This is because young drivers under 25 are considered high-risk and pay the most for car insurance. 

Companies like Geico and State Farm still offer competitive rates to teens, especially if you add a young driver to an existing policy. However, expect to pay more than average if you’re a teen driver looking for their own policy. 

The easiest way to save money on teen car insurance is to avoid accidents and speeding tickets. Teens with safe driving habits get the lowest rates. You can also ask about discounts for safe driving classes and good grades.

Finally, assign the young driver to the cheapest vehicle and consider only having liability auto insurance to get the cheapest car insurance costs overall.