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Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated the top auto insurance providers
130
Providers ReviewedOur team looked at over 100 of the top auto insurance providers in the U.S., from national providers like USAA, Travelers and State Farm to regional providers like Erie Insurance.
8,500
Data Points AnalyzedTo properly score each auto insurance provider, we looked at cost data, claims processes, customer review scores, industry standing, available discounts, coverages and add-ons.
800
Research HoursOur team put in the time so you don’t have to, evaluating cost data, reading customer reviews and researching companies to determine the most reliable options for coverage.
8,500
Customers SurveyedWe asked thousands of customers to describe their experience with their auto insurance provider to understand how real customers feel about their insurers.
Learn more about our methodology and editorial guidelines.
How Much Is Car Insurance for 21-Year-Olds
According to our rate estimates, 21-year-olds pay an average of $2,786 per year or $232 per month for full-coverage car insurance. That’s about 56% more expensive than the average for 35-year-old drivers, which is $1,785 per year or about $149 per month. Typically, auto insurance rates are much more expensive for 21-year-olds than they are for older drivers.
Factors That Affect Car Insurance Costs for 21-Year-Olds
Car insurance costs for 21-year-old drivers are determined based on several factors, including driving history, location and credit score. Gender also plays a role in calculating your premiums, especially as a teen or young adult. For instance, young men have disproportionately higher accident rates, which causes them to pay more for coverage than young women. However, some states do not allow insurance companies to use gender in calculating insurance premiums.
Why Is Car Insurance So High for a 21-Year-Old?
Compared to older drivers, 21-year-olds have less driving experience and are more likely to be involved in accidents. Car insurance companies compensate for these risk factors by charging this age group higher rates.
According to the AAA Foundation for Traffic Safety, drivers between the ages of 20 and 24 were 74% more likely to get into an accident than drivers in their 30s in 2015. Below, you can see crash rates for each age group.
| Age Group | Crashes per 100 Million Miles Driven |
|---|---|
| 16–17 | 1,432 |
| 18–19 | 730 |
| 20–24 | 572 |
| 25–29 | 526 |
| 30–39 | 328 |
| 40–49 | 314 |
| 50–59 | 315 |
| 60–69 | 241 |
| 70–79 | 301 |
| 80+ | 432 |
High-risk drivers pay higher rates on average, and young drivers typically fall into this category.
Cheapest Car Insurance for 21-Year-Olds
The cheapest car insurance for 21-year-olds is USAA, which offers average rates of $134 per month. However, USAA is only available to military members, veterans and their immediate families. Geico is the cheapest company available to any 21-year-old driver, with average rates of $154 per month. Other affordable companies include Auto-Owners Insurance, Erie Insurance and Nationwide.
The best car insurance for 21-year-olds isn’t necessarily the cheapest, but cheap rates definitely help. Below, you can see how 11 popular providers rank on car insurance cost for 21-year-olds.
| Car Insurance Company | Average Annual Cost Estimate | Average Monthly Cost Estimate |
|---|---|---|
| USAA | $1,609 | $134 |
| Geico | $1,844 | $154 |
| Auto-Owners Insurance | $2,074 | $173 |
| Erie Insurance | $2,103 | $175 |
| Nationwide | $2,147 | $179 |
| State Farm | $2,322 | $194 |
| American Family Insurance | $2,469 | $206 |
| Travelers | $2,513 | $209 |
| Market Average | $2,786 | $232 |
| Progressive | $2,872 | $239 |
| Farmers | $3,295 | $275 |
| Allstate | $3,302 |
*Car insurance estimates are based on full-coverage policies with $50,000 bodily injury per person, $100,000 bodily injury per accident, $50,000 property damage per accident and a $500 deductible for collision coverage and comprehensive coverage.
Cheapest Car Insurance for 21-Year-Olds in Each State
Location is one of the factors that affects what you pay for car insurance, and rates can vary significantly by state. Below are each state’s cheapest car insurance companies for full coverage for 21-year-olds. According to our estimates, USAA and Geico are the cheapest providers in many states.
| State | Car Insurance Company | Annual Rate Estimate |
|---|---|---|
| Alabama | USAA | $1,561 |
| Alaska | Geico | $1,187 |
| Arizona | Geico | $1,377 |
| Arkansas | USAA | $1,284 |
| California | USAA | $2,046 |
| Colorado | Geico | $1,460 |
| Connecticut | Geico | $1,471 |
| Delaware | USAA | $1,856 |
| Washington D.C. | Geico | $1,577 |
| Florida | Geico | $2,630 |
| Georgia | USAA | $1,643 |
| Hawaii | USAA | $1,006 |
| Idaho | State Farm | $1,117 |
| Illinois | Geico | $1,453 |
| Indiana | Geico | $1,142 |
| Iowa | State Farm | $1,335 |
| Kansas | USAA | $1,333 |
| Kentucky | Geico | $1,751 |
| Louisiana | USAA | $2,410 |
| Maine | USAA | $837 |
| Maryland | USAA | $1,237 |
| Massachusetts | Geico | $3,581 |
| Michigan | Progressive | $2,513 |
| Minnesota | USAA | $1,631 |
| Mississippi | USAA | $1,202 |
| Missouri | USAA | $1,099 |
| Montana | USAA | $1,304 |
| Nebraska | USAA | $1,668 |
| Nevada | Geico | $1,586 |
| New Hampshire | USAA | $1,195 |
| New Jersey | Geico | $1,897 |
| New Mexico | USAA | $1,224 |
| New York | Progressive | $2,075 |
| North Carolina | Erie Insurance | $1,130 |
| North Dakota | USAA | $1,170 |
| Ohio | Nationwide | $1,192 |
| Oklahoma | USAA | $1,438 |
| Oregon | Geico | $1,516 |
| Pennsylvania | Nationwide | $1,820 |
| Rhode Island | USAA | $1,713 |
| South Carolina | American National | $1,108 |
| South Dakota | USAA | $1,751 |
| Tennessee | USAA | $1,279 |
| Texas | Texas Farm Bureau | $1,629 |
| Utah | Geico | $1,251 |
| Vermont | USAA | $1,212 |
| Virginia | USAA | $1,364 |
| Washington | USAA | $1,157 |
| West Virginia | USAA | $1,401 |
| Wisconsin | Geico | $1,000 |
| Wyoming | American National | $1,233 |
10 Cheapest States for 21-Year-Olds
While 21-year-olds pay $232 per month on average nationwide, drivers in some states pay much less. Insurance in North Carolina averages $129 per month for the age group, for example.
| State | Annual Cost Estimate | Monthly Cost Estimate |
|---|---|---|
| North Carolina | $1,552 | $129 |
| Ohio | $1,696 | $141 |
| Vermont | $1,708 | $142 |
| Idaho | $1,733 | $144 |
| Maine | $1,756 | $146 |
| Hawaii | $1,819 | $152 |
| Virginia | $1,875 | $156 |
| Iowa | $1,895 | $158 |
| North Dakota | $2,054 | $171 |
| Wisconsin | $2,064 | $172 |
10 Most Expensive States for 21-Year-Olds
Whether because of population density or insurance regulations, some states are much more expensive for 21-year-olds than others. Michigan, Connecticut and Massachusetts top the list.
| State | Annual Cost Estimate | Monthly Cost Estimate |
|---|---|---|
| Michigan | $6,257 | $521 |
| Connecticut | $5,357 | $446 |
| Massachusetts | $4,818 | $402 |
| Louisiana | $4,677 | $390 |
| Florida | $4,576 | $381 |
| New York | $4,088 | $341 |
| Nevada | $3,527 | $294 |
| Delaware | $3,363 | $280 |
| Rhode Island | $3,331 | $278 |
| Montana | $3,283 | $274 |
Best Car Insurance for 21-Year-Olds
Our top five picks for the best car insurance for 21-year-olds are Geico, USAA, State Farm, Nationwide and Auto-Owners Insurance. When comparing car insurance companies, our team considers cost, reputation, coverage, availability and customer experience. We found these companies to be affordable for young adult drivers on average.
| Car Insurance Company | Overall Rating | Our Award |
|---|---|---|
| 1. Geico | 9.1 | Best for Budget-Conscious Drivers |
| 2. USAA | 9.2 | Best for Military Members |
| 3. State Farm | 9.4 | Best Customer Experience |
| 4. Nationwide | 9.1 | Best for Usage-Based Insurance |
| 5. Auto-Owners Insurance | 8.9 | Best for Young Drivers |
*The overall rating applies to a standard driving profile, while the ranking order applies to 21-year-old drivers.
*Cost Data taken from 2022 information
#1: Geico
Geico Overview
Geico is our top pick overall for the best car insurance for 21-year-olds. Its car insurance rates for 21-year-olds are about 34% cheaper than the market average for the age group. Geico also offers a 15% good student discount and a discount of up to 22% for those who have driven for five years with no accidents.
The company has been around since 1936 and has an A+ rating from the Better Business Bureau (BBB).
Learn more in our Geico insurance review.
#2: USAA
USAA Overview
USAA offers the cheapest car insurance for 21-year-olds on average, with rates about 42% below the market average. However, we didn’t name it the best car insurance for 21-year-olds because it isn’t available to everybody. You can only qualify if you are enlisted in the military, are a veteran or have a parent who’s a USAA member.
USAA not only has low rates for 21-year-olds but is also known for reliable customer service. The company holds an A+ rating from the BBB and earned the highest score in nearly every region in the country in the J.D. Power 2022 U.S. Auto Insurance Study℠.
Learn more in our USAA insurance review.
#3: State Farm
State Farm Overview
State Farm is another national provider that offers affordable car insurance premiums for 21-year-old drivers. Our estimates show that State Farm’s average rates are about 17% cheaper than the national average for this age group.
State Farm also offers discounts for younger drivers, including a generous good student discount of up to 25% for maintaining a B average. Younger drivers may also save money with State Farm’s Steer Clear® program, an app-based driving course for drivers under 25.
Learn more in our State Farm insurance review.
#4: Nationwide
Nationwide Overview
On average, 21-year-old drivers save about 23% with Nationwide compared to the national average. One thing that makes Nationwide unique is that it offers two usage-based telematics insurance options. SmartRide® can award discounts of up to 40% off based on a person’s driving habits by tracking acceleration, braking, nighttime driving and more. The other option, SmartMiles®, is a pay-per-mile insurance program that can help people who don’t drive very often save money.
Nationwide has a good reputation in the industry, earning an A+ financial strength rating from AM Best and an A+ rating from the BBB.
Learn more in our Nationwide insurance review.
#5: Auto-Owners Insurance
Auto-Owners Overview
Another affordable car insurance company for 21-year-olds is Auto Owners. Our estimates show 21-year-olds pay about 26% less than the national average with Auto-Owners. The company offers a good student discount of up to 20% and a discount for students who are away at school and leave their cars at home. However, Auto-Owners is only available in 26 states.
Read more: Auto-Owners Insurance Reviews
How To Save on Car Insurance for 21-Year-Olds
Thankfully, age isn’t the only thing that determines car insurance rates. There are a few things you can do to find cheap rates on the best car insurance for 21-year-olds. We recommend thinking about your coverage level and deductible amount, comparing providers, keeping a clean driving record and finding discounts.
Pick the Right Coverage
To save money, you could decrease the amounts covered by options like comprehensive and collision insurance. You could also forgo full coverage and just get minimum coverage levels of bodily injury liability and property damage liability. However, make sure you can handle any costs that your minimum coverage won’t pay for if you’re at fault for an accident.
Choose an Appropriate Deductible
You can lower your payments by increasing your deductible, which is the amount you pay out of pocket if you file a claim. Be sure you can afford the deductible, though.
Compare Providers
One of the easiest ways to get a better rate is to compare companies. We recommend comparing rates each time your car insurance policy is up for renewal. The cheapest companies for teen drivers aren’t necessarily the cheapest for drivers in their early 20s, so it pays to check rates as you get older.
Keep a Clean Driving History
Getting a speeding ticket or causing an accident are surefire ways to get higher rates, and 21-year-old drivers already pay more than average. A clean driving history keeps your rates as low as possible.
Find the Best Car Insurance Discounts
Not all companies offer the same discounts or the same savings on similar discounts. In our picks for the best car insurance for 21-year-olds above, you can see State Farm, Geico and Auto-Owners offer different discount amounts for good students.
Compare quotes online to find the right discounts for your situation. You can also work with an insurance agent to make sure you find all applicable discounts.
As you shop around, keep an eye out for the following types of car insurance discounts:
- Safe driver
- Driving course
- Usage-based programs
- New car
- Added safety features
- Good student
- College student away at school
- Bundling insurance policies
Another way for 21-year-old drivers to save money is to stay on their parents’ policy. This is usually only possible if the young driver has the same permanent address as their parents.
Cheapest Car Insurance for 21-Year-Olds: The Bottom Line
In this article, we outlined the cheapest car insurance rates for 21-year-olds and broke down costs by state. Our top five recommendations for the best car insurance for 21-year-old drivers are Geico, USAA, State Farm, Nationwide and Auto-Owners Insurance. Even with our top picks in mind, we recommend that you compare car insurance quotes from multiple companies to find the best option.
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Best Car Insurance for 21-Year-Olds: FAQ
Below are frequently asked questions about the best car insurance for 21-year-olds:
Yes, car insurance generally goes down at age 21. Between ages 19 and 21, rates decrease by about 25%. The average cost of car insurance coverage decreases each year between ages 16 and 30, and its steepest decline is during the teen years. Middle-aged drivers typically find the best rates.
The cost of car insurance is high for 21-year-old drivers because providers consider them riskier drivers. Those who are 21 have less experience than older drivers, and they’re statistically more likely to be involved in accidents.
Our estimates show Geico, USAA, State Farm, Erie Insurance, Auto-Owners Insurance and Nationwide are all affordable for drivers in their early 20s. We recommend comparing rates from a few leading companies to find the cheapest option. The types and amounts of coverage a 22-year-old needs depend on their state’s minimum requirements, their financial situation and whether their car is financed.
Full-coverage car insurance costs about $4,088 per year or $341 per month on average for 21-year-olds in New York State. That’s more than double the national average cost for all drivers, which is $1,730 per year or $144 per month. Drivers in New York City and on Long Island usually pay more than drivers in Upstate New York.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have questions about this page, please reach out to our editors at editors@marketwatchguides.com.
