Car Insurance for 25-Year-Olds: Best Cheap Companies (2024) (2024)

FAQs

What is the cheapest car insurance for a 25-year-old? ›

Cheap Car Insurance for 25-Year-Olds

If you're looking for the lowest rates, Nationwide offers the best car insurance for 25-year-olds, with rates of $1,663 per year or $139 per month on average. Travelers is another cheap option, with average rates of $1,694 year or $141 per month.

Key Takeaways

The average annual cost of car insurance for 25-year-olds is around $1,555 for full coverage and $360 for liability-only. This marks a significant decrease in rates compared with younger drivers. GEICO and State Farm offer the most competitive rates for 25-year-olds.

Car insurance does get more affordable at 25. The average price of car insurance for a 25-year-old is $3,207 for an annual policy. By contrast, drivers pay an average of $7,179 at 18 and $4,453 at 21, which demonstrates that car insurance does go down as you age.

The top 10 cheapest car insurance companies are Nationwide, Geico, State Farm, Travelers, Progressive, AAA, Allstate, Chubb, Farmers and USAA.

At Progressive, rates drop by 9% on average at age 25. But there are other cost factors impacting your car insurance, such as your claims history. So if you're in an accident right before you turn 25, your rate may not drop.

Car insurance typically drops as you grow older, when you drive safely for three to five years following an accident or citation, and when you switch to a cheaper company. Both men and women see the steepest drop in car insurance costs between ages 18 and 19.

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.

The Insurance Institute for Highway Safety reports that teen drivers are four times more likely to get into a car crash than drivers 20 and older. As a result, car insurance companies view young drivers as the most risky to insure. Drivers ages 16 to 24 tend to face the highest premiums compared to other age groups.

State Farm and GEICO are the most affordable car insurance providers for 25-year-old female and male drivers, respectively. Car insurance for a 25-year-old male driver costs more than for a female driver. This is because male drivers are often seen as higher risk due to their driving behavior and accident statistics.

Why is AAA insurance so expensive? ›

AAA insurance premiums tend to be more expensive than the national average because AAA doesn't write its own policies. Each regional club operates independently and sells insurance policies underwritten by different agencies.

Insurance companies often see young drivers as a greater risk because they are more prone to accidents and poor decision-making — both of which raise the potential cost of claims that need to be paid out by insurers. As a result, these added risks lead to higher premiums when insuring teen drivers.

Both Geico and Progressive offer cheap car insurance to drivers across the country. Geico's rates are typically lower overall, but Progressive tends to offer better prices to high-risk drivers. High-risk drivers are those with a recent DUI, at-fault accident or speeding ticket on their driving record.

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.

Best Car Insurance Companies for 20-Year-Olds. Our top picks for the best car insurance for 20-year-olds are State Farm, USAA, Geico, Erie Insurance and Liberty Mutual. We've found these companies to be affordable on average for young drivers.

Cheapest full-coverage car insurance for new drivers: State Farm. State Farm has the cheapest full-coverage car insurance for new drivers in the country, with an average annual rate of $4,078, or $340 a month. Geico is the second-cheapest option for teen drivers, with full coverage at $4,866 a year, or $406 a month.