The Cheapest Car Insurance for Drivers Under 25
Travelers offers the cheapest insurance for drivers under 25, with average premiums starting at just $96 per month.
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Written byErin Gobler
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Erin Gobler is a personal finance writer and journalist who has been writing for Compare.com since 2023. With more than five years of experience personal finance experience, Erin has covered topics such as investing, credit cards, mortgages, insurance, and more.
Her work has been featured in major publications like Business Insider, Fox Business, and Time.
Erin received her bachelor’s degree from the University of Wisconsin-Oshkosh in 2013, studying journalism and political science. She also received a certificate of financial planning from Boston University in 2022.
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Edited byLequita Westbrooks
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Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Table of contents
Young drivers often pay more for car insurance than any other age group, which makes shopping for insurance challenging. Drivers younger than 25 have higher premiums because they have less driving experience, tend to practice unsafe driving habits, and are more likely to file a claim. Insurers charge this group higher premiums to make up for this risk.
Drivers under 25 can expect to pay an average of $174 per month for an insurance policy, while the average American pays around $158 per month, according to Compare.com data. But you can lower your premiums by comparing car insurance quotes, taking advantage of discounts, and staying on your parents’ policy.
Keep reading to learn more about the cost of car insurance for young adults, the cheapest companies for drivers under 25, and how to save on your premiums.
Quick Facts
Travelers offers the cheapest auto coverage for drivers under 25, at an average of $96 per month.
Car insurance costs the most for teens but typically gets cheaper once you turn 25, as long as you maintain a clean driving record.
Young drivers can save on their premiums by staying on their parents’ policy, practicing safe driving, and shopping around for coverage.
The Cheapest Car Insurance Companies for Drivers Under 25
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Car insurance premiums vary significantly from one driver and one insurance company to the next. While certain companies generally have lower rates, your personal rates also depend on factors like your age, driving history, credit history, and ZIP code.
Though younger drivers tend to pay higher premiums, it’s still possible to find affordable rates. We’ve rounded up the four cheapest insurers for drivers younger than 25. The table below highlights each insurer’s average monthly premiums and how they compare to the national average.
Insurance Company  | Average Monthly Premium | Average Yearly Savings* |
|---|---|---|
| Travelers | $96 | $936 |
| Farmers | $101 | $876 |
| Safeco | $111 | $756 |
| Nationwide | $113 | $732 |
| Industry average | $174 | — |
*Savings are calculated based on the difference between each insurer’s average monthly premium and the national average for all insurers.
Travelers offers the cheapest car insurance for drivers under 25, with an average monthly premium of just $96, according to our analysis. That’s much less than the national average.
Now, let’s discuss why young adults tend to pay considerably more than older drivers.
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Why Car Insurance Is More Expensive for Young Drivers
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Car insurance companies set rates based on your risk profile — the higher your risk of filing a claim, the higher your premiums will be. Young drivers — particularly teens — have some factors that make them riskier to insure, which is why insurers charge them higher rates.
Here are four reasons young drivers pay more:
Less driving experience than older drivers
Higher chance of getting into car crashes
More likely to drive at night, when the risk of car crashes is higher
More likely to engage in risky activities, such as speeding, distracted driving, or not wearing a seat belt
But you don’t have to pay expensive rates forever — as long as you practice safe driving habits.
Does car insurance get cheaper when you turn 25?
Yes, car insurance rates drop substantially when you turn 25 and continue to drop as you age. Rates are highest for teenage drivers and may start to decline once you reach your 20s, according to the Insurance Information Institute (Triple-I). But most drivers see a large decrease in their premiums by the time they reach age 25.
Your premiums will continue to decline as you get older once you get more experience behind the wheel and reduce your likelihood of car accidents and other traffic violations. But savings will vary for each driver and insurer. For example, Progressive advertises that it drops rates by an average of 9% when drivers turn 25.
Keep in mind that this general rule of thumb won’t apply to every driver. For example, if you get a speeding ticket or file a claim before you reach age 25, then you could actually see your premiums go up rather than down.
Our Top 5 Tips to Save on Car Insurance If You’re Under 25
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Young drivers can get sticker shock when gathering car insurance quotes. But you can get the cheapest insurance if you follow these money-saving tips. For example, staying on your parents’ policy and driving an older car can help keep rates low. You can also practice safe driving habits, increase your deductibles, and compare quotes regularly.
Below are our top five tips drivers under 25 can use to save money on their next car insurance policy:
1. Stay on your parents’ policy, if possible
Staying on your parents’ policy can offer a lot of savings. You can remain on their policy as long as you live with them full-time, even if you’re away at college. If you have a car, you can usually stay on your parents’ policy if you park it at their address. And if you don’t have a car, it’s often cheaper to use one of your parents’ vehicles.
2. Practice safe driving
Keeping a clean driving record without tickets, DUIs, or at-fault accidents can make you eligible for a safe driver discount. The more you practice safe driving habits, the better your insurance rates could be. And even though you can’t get rid of a recent ticket or accident right away, driving safely from now on helps ensure cheaper rates in the future since most insurance companies consider only your last three to five years.
3. Drive an older, less expensive vehicle
When you drive an older, cheaper car, you can also get cheaper auto insurance. And you might not need comprehensive or collision coverage if the car isn’t worth much and you can afford to replace it. You can also remove optional coverages, like gap insurance, for paid-off vehicles.
4. Consider a higher deductible
If removing comprehensive and collision insurance doesn’t make sense, you can save money by increasing your deductibles. The deductible is the amount you pay for your car’s repairs after an accident.
When you choose a lower deductible, the insurance company pays more for the claim, but you also pay a higher premium. By going with a higher deductible, you take on more risk if you have to file a claim, but you also get cheaper insurance rates. Just make sure you can afford to pay the higher deductible if you damage your vehicle.
5. Shop around and compare quotes regularly
Shopping around and comparing car insurance quotes regularly is another way to get the cheapest car insurance if you’re under 25. Rates can vary significantly from company to company, so using an insurance comparison site is the easiest way to ensure you’re getting the best deal. We suggest doing this each time your policy renews, annually, or when you make a policy change, like buying a different car or changing your coverage.
Compare the same coverage types, deductibles, and limits when getting quotes, letting you see which company offers the cheapest auto insurance for your age and driving profile. We recommend comparing quotes from at least three different insurers.
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Car Insurance Discounts for Young Drivers
Most car insurance companies offer a variety of discounts to help you save on the cost of car insurance. While many of these may apply to some young drivers, many companies also offer discounts specifically for young drivers. Here are six discounts you should ask your insurance company about:
Good student discount: One of the most common discounts for young drivers is a good student discount. Many insurers offer this discount if you or your child maintain a B or above GPA in high school or college.
Driver’s education course: Young drivers can get a discount from certain insurers for taking a driver training or education course. Insurers that offer this discount include State Farm, GEICO, and Travelers.
Student away at school: Some insurers offer a student away at school discount if you have a student on your policy who leaves home to go to school without a vehicle and only drives when they’re home visiting.
Young driver discount: A handful of insurers offer discounts simply for adding a young driver to your policy. For example, if you’ve been with Progressive for at least a year, it’ll give you a discount when you add a driver under age 18.
Loyalty discount: Some insurers, including American Family and USAA, offer loyalty discounts if you’re a young driver with your own policy as long as your parent has an active policy with the same insurer.
Telematics programs: If you practice safe driving habits, you can save on your premiums by signing up for your insurer’s telematics discount program. It tracks your driving and grades you on your driving habits. The better you drive, the more you can save.
Staying on Your Parents’ Policy vs. Getting Your Own
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When deciding whether to stay on your parents’ auto policy or purchase your own policy, it’s important to evaluate the benefits and drawbacks of each scenario to make the best decision for you.
Here’s a little more information about both options.
Remaining on your parents’ policy
It’s often cheaper for you to stay on your parents’ insurance policy. Sure, your parents will end up paying more than they previously were, but the added cost will be substantially less than if you signed up for your own policy.
In addition to lower premiums, remaining on your parents’ insurance may allow you to take advantage of other discounts, such as a multi-car discount or a loyalty discount if your parents have been with the same insurer for a long time. And the good news is that, unlike with health insurance, there’s no maximum age for you to stay on your parents’ policy — you just need to live under their roof.
Getting a separate policy
There may be some situations where it’s a good idea for you to get your own policy. First, to be on the same policy as your parents, you’ll usually have to live in the same household. While there’s an exception if you’re a student away at college, if you move out of your parents’ home permanently, you’ll have to get your own policy.
It’s also worth noting that it may not be in your parents’ best interest to keep you on their car insurance if you have a poor driving history or practice unsafe driving behaviors. Not only could this increase your family’s insurance premiums, but it could also lead to liability claims against your parents or cause them to lose their insurance altogether.
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FAQs About Car Insurance for Drivers Under 25
Here are answers to some commonly asked questions about car insurance for drivers under 25.
Are newer cars cheaper to insure for young drivers?
Not typically. Car insurance is generally cheaper for older vehicles because they would be less expensive to repair or replace after an accident. But newer vehicles are more likely to qualify for certain car insurance discounts because of the safety features that often come with newer cars.
How much is insurance for a first-time driver?
The national average cost of car insurance for young drivers under 25 is $174 per month, according to our data. But average rates are even higher for teen drivers, at $232 per month. Keep in mind that insurance premiums for new drivers will vary depending on many factors, including age, ZIP code, location, gender, and more.
Who typically has the cheapest car insurance?
We found that Travelers Insurance offers the cheapest overall policies for young drivers, with an average monthly premium of $96 compared to the national average of $174. But the cheapest car insurance company for you will depend on your unique driver profile.
Data Methodology:
Data scientists at Compare.com analyzed more than 50 million real-time auto insurance quotes from more than 75 partner insurers in order to compile the rates and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.
All the rates listed in this article have been collected from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide readers with insights into how auto insurance companies determine their premiums.
Sources:
CDC, “Risk Factors for Teen Drivers,” accessed September 10, 2024.
Insurance Information Institute, “What determines the price of an auto insurance policy?” accessed September 10, 2024.
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Erin GoblerPersonal Finance Writer
Erin Gobler is a personal finance writer and journalist who has been writing for Compare.com since 2023. With more than five years of experience personal finance experience, Erin has covered topics such as investing, credit cards, mortgages, insurance, and more.
Her work has been featured in major publications like Business Insider, Fox Business, and Time.
Erin received her bachelor’s degree from the University of Wisconsin-Oshkosh in 2013, studying journalism and political science. She also received a certificate of financial planning from Boston University in 2022.
Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.