Cheapest Car Insurance for Young Adults: Best Rates (2024) (2024)

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There’s no single company that always offers the best car insurance for young adults, but certain options stand out. Our rate estimates show that USAA and Geico are consistently affordable choices for younger drivers in their 20s.

Cheap Insurance Rates for Young Drivers

Young drivers pay substantially more for car insurance coverage because they lack driving experience. While drivers in their early 20s will find more affordable options than teenage drivers, they still pay more for auto insurance than older drivers in their 30s and up.

The tables below show the cheapest car insurance providers for 21-year-old drivers and 25-year-old drivers.

Cheapest Young Driver Insurance for 21-Year-Olds

According to our cost research, USAA provides the cheapest young driver insurance for 21-year-olds, costing $134 per month or $1,609 per year. Geico, Auto-Owners and Erie Insurance are also affordable options for drivers.

Cheapest Young Driver Insurance for 25-Year-Olds

At $139 per month or $1,663 per year, Nationwide offers the cheapest young driver insurance for 25-year-olds. Travelers, Erie and Geico are also strong choices for younger motorists.

Cheapest Young Driver Insurance for 30-Year-Olds

Drivers in their 30s pay significantly less for car insurance coverage. We found that USAA tends to offer the cheapest young driver insurance for 30-year-olds, costing an average of $97 per month or $1,160 per year.

Based on our research, we found that the average 21-year-old driver pays $2,786 per year or $232 per month for full coverage insurance. This is hundreds of dollars more expensive than what a 25-year-old or 30-year-old pays for car insurance.

The sections below provide information about the cheapest car insurance for 21-year-olds, 25-year-olds, an 30-year-olds by state.

Cheapest Insurance for 21-Year-Olds

While rates are on the high side for 21-year-olds, they’re typically much lower than rates for car insurance for teenage drivers. Average annual premiums for full coverage range from a low of $1,552 in North Carolina to $6,257 in Michigan.

Cheapest Insurance for 25-Year-Olds

It’s considerably less difficult to find cheap car insurance for young adults when you’re 25 rather than 21. Average rates for full coverage for 25-year-olds run from a low of $1,199 per year in Vermont to $3,643 per year in Michigan.

Cheapest Insurance for 30-Year-Olds

Getting cheap car insurance for young adults becomes much easier once you reach 30 years old, as most drivers have gained road experience by that point. Average annual premiums for full coverage go from a low of $1,009 in Maine up to $3,902 in Michigan

Why Do Insurance Companies Charge More for Young Drivers?

Cheap car insurance for young adults drivers can be difficult to find because the group is often categorized as high risk. That’s due to multiple factors, which we’ll discuss in further detail below.

Inexperience on the Road

While young adults have typically spent more time behind the wheel than new drivers, they’re still lacking in certain aspects of driving. Car insurance companies take that into account by charging higher rates for those with little more than a decade of experience behind them.

Rates tend to decrease as young adults gain more years of experience on the road. There are also good driver policy discounts available for motorists who go a certain number of years without receiving traffic violations.

High Numbers of DUIs

In a 2020 study from the National Highway Traffic Safety Administration (NHTSA), the highest percentage of drunk drivers in the U.S. was among the 21- to 24-year-old age group. In second place were 25- to 34-year-olds.

Young male motorists in particular get involved in many DUIs, with four male drunk drivers being caught for every female. Since driving while intoxicated increases your risks on the road, insurers tend to charge higher rates for young drivers who have a stronger chance of getting a DUI.

Greater Number of Serious Accidents

Young adults also struggle to find cheap car insurance because of their overrepresentation in car accidents. A report from the NHTSA found that people between the ages of 25 and 34 made up nearly 20% of all fatal crashes in the U.S. in 2021, while they only account for 14% of the overall population, according to the U.S. Census Bureau.

Since young adults have a greater likelihood of getting into serious accidents, auto insurers often charge them higher prices. Motorists in this age group are considered higher-risk drivers, and their premiums often reflect that.

Prices for auto insurance may look somewhat alarming at first glance if you’re a young adult. However, there are ways to limit the cost of coverage. We’ll explain six of the best methods below.

Reduce Your Coverage Limits

Lowering your car insurance coverage leaves your car and finances less protected, but it can help you get the cheapest auto insurance on the market. You’ll likely be required to carry bodily injury liability coverage and property damage liability insurance. In some states, minimum coverage may be more extensive than that.

However, you’ll pay higher rates if you add optional types of insurance such as comprehensive or collision coverage. In certain states, uninsured motorist coverage isn’t required either, and in most states, medical payments coverage (MedPay) isn’t.

Drivers with add-on coverages such as roadside assistance, rental car reimbursem*nt and accident forgiveness could decrease their insurance costs by cutting them out.

Increase Your Auto Insurance Deductible

It’s much easier to find cheap car insurance for young adults if you choose a higher deductible on your policy. This means you’ll pay more out of pocket if you file a claim. It’s up to you whether you’d rather pay more up front for coverage or risk having to pay extra down the road.

Bundle Your Insurance Policies

If you’re paying for homeowners or renters insurance, bundling your car’s existing policy with these coverages could get you lower rates for each policy. Since you’ll need protection for both your vehicle and the place you live, it’s a smart move to lower the cost of car insurance by using the same provider.

Raise Your Credit Score

In most states, auto insurance providers can use policyholders’ credit scores to help determine their rates. You’ll pay considerably more for your own policy if you have bad credit compared to someone with a better score.

Improving your credit score takes time, but it can be done. You’ll save on more than just car insurance if you have good credit, as lenders will generally offer you lower interest rates on loans and lines of credit.

Compare Car Insurance Quotes

It’s far easier to find cheap car insurance for young adults if you get free quotes from multiple providers. Reaching out for car insurance quotes will help you see whether you’re being given fair rates.

Enroll in a Telematics Insurance Program

With telematics insurance, also known as usage-based insurance, your auto insurance provider tracks your driving habits through a mobile app or similar tool. If you drive safely or don’t put many miles on your car, you could earn a discount on your premium. But keep in mind that activity such as speeding could lead to higher rates with some usage-based insurance programs.

Some of the car insurance discounts available to you may depend on whether you live with your parents or are enrolled in college full time. Consider these potential savings opportunities.

While discounts for good grades won’t be available once you graduate from college, there are still savings opportunities. Consider these potential car insurance discounts:

• Multi-car discount: You may be able to get a multi-car discount with your parents if you live with them. If you have a domestic partner or a spouse, you can get this discount if you share a car insurance policy with that person.
• Good student discount: If you’re still a high school or college student, the best rate could be found by getting a good student discount for maintaining at least a B average.
• Safe driver discount: Those who go multiple years without speeding tickets, DUI violations or at-fault accidents could be rewarded for their safe driving practices with lower car insurance premiums.
• Vehicle safety discount: The cost of auto insurance coverage could decrease if you own a vehicle with working air bags, anti-lock brakes and anti-theft devices.
• Affiliation discounts: Young adult drivers get discounts for being military members, federal employees or graduates of certain universities. Consider your affiliations to discover whether you could take advantage of these savings.

While defensive driving courses are helpful for improving your driving habits, most insurers only offer discounts to motorists who are over 50 years old. Young drivers could still benefit by learning to safely navigate the road, which can help them maintain clean driving records.

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.