Young drivers face unique challenges when it comes to finding the right car insurance in 2023. How can they secure the best rates without compromising on coverage?
When you’re a teenager or a young adult, buying car insurance is rarely fun or affordable. This is true for anyone trying to add coverage to a parent’s existing policy, but it’s even more true for young adults who need to find cheap car insurance on their own.
That said, the best car insurance for young drivers offers quality protection for the entire household without breaking the bank. If you’re looking for the best cheap car insurance for young adults, however, you’ll need to compare policies and plans while also checking for discounts you might qualify for.
In the meantime, you’ll want to see which types of auto insurance you really need and which ones you can go without.
Table of Contents
- Car Insurance Guide
- How to Lower Car Insurance Costs
- How We Found the Best Car Insurance for Younger Drivers
- Summary of the Best Car Insurance for Younger Drivers January 2024
We compared more than 20 of the best auto insurance companies to help you find the best car insurance for young drivers in 2024. If you’re ready to buy a policy or begin comparing all your options, you can stop looking and start your search here.
Our Picks for Best Car Insurance for Younger Drivers
- Nationwide: Best for Teen Drivers
- American Family: Best for Usage-Based Discounts
- Allstate: Best for Good Students
- State Farm: Best for Safe Vehicle Discounts
- Geico: Best Discounts Overall
- USAA: Best for Military
The reviews below can help you learn more about the best car insurance companies that made our ranking, including the policy options and special programs for young drivers they offer.
Nationwide offers an array of coverage options for teenagers and young drivers, as well as discounts that can make coverage considerably more affordable. Young drivers can purchase insurance with liability-only coverage, but they can also opt for collision coverage, comprehensive coverage, and even rental car reimbursem*nt coverage that kicks in when a car is in the shop getting repairs after an accident occurs.
Accident forgiveness is another optional feature for young drivers. This add-on coverage ensures that a teen or young driver’s car insurance premiums won’t surge right away after their first at-fault automobile accident occurs.
Major discounts available from Nationwide for teens and young drivers include:
- Good Student Discount: If you’re a full-time student and a Nationwide customer, you can get a discount on your premiums if you maintain a grade point average of ‘B’ or better.
- Employer-Sponsored Plan Discount: If you work for an employer who participates in a Nationwide discount plan, you can get a break there.
- Multi-Policy Discount: You can also get a discount by bundling your auto insurance with other policies, such as renter’s insurance.
- SmartRide Discount: Nationwide also offers a discount if you meet safe driver criteria as determined by the use of a plug-in device. It’s a usage-based insurance program that enables you to earn a discount for safe driving.
American Family Insurance is another highly-rated insurance company that extends coverage to young drivers and teenagers who are being added to a family plan. This company offers all the basic insurance coverage you would expect, from liability coverage to collision, comprehensive coverage, uninsured and underinsured motorist coverage, and rental car reimbursem*nt. They also offer optional emergency roadside coverage, which can be accessed with ease using the MyAmFam mobile app.
This company also offers a Safe Driver Discount Program for Teens, which monitors your teen’s driving habits with the help of a mobile app. Once a teenager drives at least 3,000 miles with the app on, families can qualify for a 10% discount on their car insurance premiums.
Other notable discounts for young drivers include:
- Away at School Discount: This discount can apply when a young driver is away at college or university and their vehicle remains parked at home.
- Good Student Discount: Students with good grades can pay less for auto insurance premiums overall.
- Multi-Product Discount: Pay less for car insurance premiums when you bundle multiple policies with American Family.
- Young Volunteer Discount: This discount can apply when a driver under the age of 25 completes 40 hours of volunteer work per year for a non-profit.
Allstate is another insurer that is known for its Accident Forgiveness program. While joining this program doesn’t help you lower your premium at first, you won’t see your monthly auto insurance costs surge after your first accident. In the meantime, Allstate also has a Safe Driving Bonus program. If you add this feature to your policy, you get a check in the mail every six months if you don’t have an accident. This is Allstate’s way of incentivizing safe driving habits.
Also, note that Allstate extends good student discounts for drivers who are under the age of 25. This means high school students and teenagers with good grades can help their parents secure lower car insurance rates, but it also means young adults in college can get a discount on their own policies.
Allstate’s best car insurance discounts for young drivers include the following:
- Allstate Drivewise Discount: Young drivers who install a device on their vehicle and let Allstate monitor their driving habits can pay less for auto insurance overall.
- Multi-Policy Discount: A multi-policy discount can apply when young drivers purchase multiple policies from Allstate, such as car insurance bundled with a renter’s insurance policy.
- Responsible Payer Discount: If you pay your premiums on time for an entire year, you can get a responsible payer discount the next year you purchase coverage.
- Smart Student Discount: This discount applies to drivers under the age of 25 who meet one of three options, including getting good grades or completing a teen driver education program.
State Farm offers a program for young drivers under the age of 25, which is called Steer Clear. This program requires drivers to use a mobile app that monitors their driving, and it is only available to young drivers who don’t have any at-fault accidents or moving violations within the last three years. Those who qualify for this program can save up to 20% off their auto insurance premiums when they avoid accidents and drive safely over the long run.
Not only does State Farm make it easy to add a young driver to a household car insurance policy, but they also offer affordable premiums for young drivers who are out on their own. Additionally, this company offers an array of discounts that relate to vehicle safety instead of the age of the driver, including passive restraint discounts and discounts for having an eligible anti-theft device installed on a vehicle.
Other discounts for young drivers offered by State Farm include:
- Drive Safe & Save Discount: This program uses information from your smartphone or your vehicle’s OnStar or SYNC communication service to calculate your discount.
- Defensive Driving Course Discount: Young drivers who complete a defensive driving course can receive 10% to 15% off their annual car insurance premiums.
- Student Away at School Discount: If you are a student under the age of 25 and you are living away from home while enrolled in school, you might qualify for this discount.
- Good Student Discount: This discount can cut your auto insurance premiums by as much as 25%, but you do have to post good grades to qualify.
Geico is one of the most price-competitive auto insurers on the market, and it offers quite a few discounts and programs for young drivers. For starters, this provider offers a family pricing program that lets young drivers get the same policy rates as experienced drivers within the same family. This means young drivers get the chance to establish a good driving record without paying high premiums that are typical for new drivers.
Geico also offers an Accident Forgiveness Program for drivers of all ages. This discount applies to only one member of the family on a single policy, but it helps prevent surging premiums in the event of an at-fault accident.
Other popular discounts from GEICO include the following:
- Good Driver Program: Young drivers can save up to 22% off car insurance premiums with the Five-Year Accident-Free Good Driver Discount.
- Government Employee Discount: This discount is valid with participating employers, yet it’s also available to federal employees. It can reduce your premium by up to 12%.
- Military Discount: Save up to 15% off your premiums if you’re a member of the military.
- Good Student Discount: This discount is available to drivers between the ages of 16 and 24 who are full-time students with a “B” average or better.
If you’re a member of the military or an eligible family member, you may also qualify for auto insurance through USAA. This company is one of the highest-rated insurance companies across the board, and they offer an array of programs and discounts for young drivers and teenage drivers alike.
As an example, USAA offers a program called SafePilot that can help anyone save up to 30% off their car insurance premiums if they complete a safe driving program and live in an eligible state. Families who have a teen on their policy can also help their kids save when they leave the next. In fact, adult children of USAA car insurance customers qualify for a 10% family discount.
Other USAA discounts for young drivers are listed below:
- Driver Training Discount: It’s possible to save on car insurance premiums if you are under the age of 21 and willing to complete a driver training or defensive driving course.
- Safe Driving Discount: You can reduce your premiums by maintaining a good driving record for at least five years.
- Good Student Discount: Young drivers get a discount with good grades at school, and students from ages 16 to 25 may be eligible.
- Family Discount: Pay less for auto insurance when you add a teenager or young adult to an existing family policy.
Car Insurance Guide
Before you settle on a new car insurance policy, you should understand the ins and outs of auto insurance for young drivers. For example, you’ll want to research the different types of car insurance, as well as the average cost of car insurance based on the policy you buy, where you live, and other factors.
How Does Car Insurance for Younger Drivers Work?
Car insurance for young drivers works the same as coverage for anyone else, yet this kind of insurance protection tends to be more expensive overall. The fact is, young drivers have considerably less experience on the road, and they consistently have accidents at a much higher rate as a result. According to the CDC on average 18 teens die every day in fatal car crashes. The Insurance Institute for Highway Safety reports that teens aged 16-19 are 3x more likely to get in a crash compared to those 20 years or older.
To account for this increased level of risk, car insurance companies charge higher premiums for the same types of coverage.
Generally speaking, however, car insurance rates tend to go down once individuals turn at least 25 with a safe driving record. Getting married can also help lower car insurance premiums considerably, as can becoming a homeowner, having a good credit score, and achieving other important life milestones.
As we noted already, the average premium for young drivers varies depending on where you live, whether you remain on a parent’s policy and other factors. However, a recent report from The Zebra shows that some age groups tend to pay much higher premiums overall, including some specific age groups below 25.
According to 2023 figures released in the study, drivers in the “teen” age group pay the most, with a typical 16-year-old driver paying an average of $6,034 per year for their own car insurance policy. Meanwhile, the average annual cost for all teenagers works out to $4,796 annually.
From there, each age group gets a better deal on auto insurance premiums until drivers reach their 60s and prices begin to tick up. The chart below shows the average car insurance premium by age group in 2023:
| Driver Age Group | Average Car Insurance Premium (Annual) |
|---|---|
| 20’s | $2,010 |
| 30’s | $1,495 |
| 40’s | $1,435 |
| 50’s | $1,350 |
| 60’s | $1,362 |
| 70’s | $1,569 |
| 80’s | $1,831 |
How to Lower Car Insurance Costs
Whether you decide to lease or buy a car or you’re currently driving an old beater while you wait for the best time to buy a new car, there are plenty of steps you can take to score more affordable car insurance premiums. Some of the best strategies you can use to save money are detailed below:
- Avoid accidents and moving violations. Getting into an accident or getting a ticket (or several) can cause your car insurance rates to surge higher than they already are. To get the cheapest car insurance possible, you’ll need to maintain a safe driving record for the long haul.
- Be willing to take driving courses. You may be able to save money on car insurance if you complete a teen driver education course or a defensive driving course. Make sure to check with your car insurance company to see which of these options can help you score a discount.
- Check for all possible discounts. You may qualify for car insurance discounts you don’t even know about, but you’ll never know unless you check. See whether your insurance company offers vehicle safety discounts, bundled policy discounts, loyalty discounts, or other discounts that can help you save money.
- Get good grades. If you’re a college student and you can maintain a good grade point average, chances are good you can score a discount on your car insurance premiums. For the most part, good grade discounts go to those who can maintain a GPA of 3.0 or better (or equivalent).
- Stay on your parent’s car insurance plan as much as possible. Generally speaking, car insurance rates for young adults are lower when they’re added to an existing policy. With that in mind, it can help to put off buying your own car insurance policy for as long as you can.
These are just some of the auto insurance discounts for students, but there might be others depending on the company you choose for coverage. When you shop around for your auto insurance policy, make sure to ask which discounts you might be eligible for.
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Important:
You may also save on the cost of owning a car if you invest in a solid car warranty. The best car warranties require an upfront payment or regular payments, but they can help you avoid pricey car repairs down the line.
How We Found the Best Car Insurance for Younger Drivers
To find the best car insurance companies on the market today, we looked for providers who have an ‘A’ rating or better for financial strength from A.M. Best.
We also looked for companies that offer highly-rated mobile apps, as well as those that advertise special programs and discounts for teen drivers.
Finally, we only considered car insurance companies that have an ‘A’ rating or better with the Better Business Bureau (BBB).
Summary of the Best Car Insurance for Younger Drivers January 2024
- Nationwide: Best for Teen Drivers
- American Family: Best for Usage-Based Discounts
- Allstate: Best for Good Students
- State Farm: Best for Safe Vehicle Discounts
- Geico: Best Discounts Overall
- USAA: Best for Military
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