Cheapest Car Insurance For New Drivers Under 21
No drivers pay more for car insurance than new drivers under 21 years old, especially teens. The companies with the cheapest car insurance for teens and 20-year-olds are Allstate, GEICO and State Farm, depending on your age. It’s best to shop around and find which is the cheapest for you, as rates won’t change drastically year to year for drivers in their teens.
MoneyGeek analyzed rates for 16- to 18-year-olds for teens who were added to their parents’ policy, rather than those who bought their own policy. Rates for 19- and 20-year-olds are for a new driver buying their own policy.
Cheapest Companies for New Drivers – Under 21
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Take Drivers Education And Drivers Training Classes
You can save a lot of money on auto insurance by taking drivers education classes. New drivers are hard to insure because they are not always aware of the rules of the road, and they are inexperienced.
There are all kinds of things you can learn with these classes, which are aimed at making people better drivers. You dont even have to be a new driver to take these classes and get discounts on your insurance rates. This is going to show insurance companies that you do know what you are doing, and that you are not as much of a risk as other new drivers. It is also going to show that you are really serious about being a safe driver.
Best Cheap Car Insurance For Teens And Young Drivers In 2022
Scoring a great deal on auto insurance isn’t easy at any age, but when you’re a young driver, there’s an added challenge. Teens have less experience on the roads and are more likely to get in accidents, so car insurance for teens tends to be pricey. But scoring a great rate is still doable. This guide will walk you through how it can be done and which car insurers young drivers may want to take a closer look at.
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Best Insurance Company For New Drivers
It’s important for first-time drivers to compare auto insurance quotes to find the lowest price, but choosing an insurance company with a great reputation is equally as important.
State Farm is our choice for best car insurance company for new drivers due to its superior rating from our editors, high financial stability marks from AM Best and top J.D. Power customer satisfaction score.
| Company | |
|---|---|
| 890 | A++ |
Our editor’s rating is determined by analyzing each company’s rates in relation to its competitors, the policy coverages it offers and its customer satisfaction scores.
J.D. Power’s Auto Claims Satisfaction Study is an annual nationwide survey that polls insurance customers about their experience filing claims with their insurer. Higher scores are better, and the best possible rating is 1,000.
AM Best’s Financial Strength Rating is a letter grade that describes the overall financial health of an insurance company and its ability to pay out claims. The best score available is “A++”. All of the companies we included have a Financial Strength Rating from AM Best of “A” or better, meaning they have an “excellent” or “superior” ability to pay out claims, even in difficult economic times.
Who Needs New Driver Car Insurance
Anyone getting their first drivers license in the U.S. or getting a license after a lengthy gap in their driving and/or insurance history typically needs to pay new-driver car insurance rates.
U.S. insurance companies generally do not recognize driving and insurance records in foreign countries. This means people who have moved to America from another country are likely to pay higher rates for car insurance. Americans who have lived abroad for an extended period may be charged more, too.
In general, insurance companies consider you a new driver if you:
- Are getting your first drivers license, regardless of your age
- Have moved to the United States from a foreign country, even if you had a license and insurance in your former home
- Let the drivers license and insurance coverage you had in America lapse while living abroad
- Have had a sizable gap in car insurance coverage for any reason, including not having had a car for a while
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Cheapest Car Insurance For New Drivers Under 25 Years Old
Insurance for new drivers in their 20s can be expensive, but MoneyGeek found drivers under 25 can find the most savings with GEICO. Across all ages from 21 to 25, it offered the cheapest rates on average.
If you’re in your 20s and you’ve left your parents’ home, car insurance can be expensive as you’re still considered a new and experienced driver, but you can no longer be added to your parents’ policy. Click on your age to learn more about the cheapest options for you.
Cheapest Companies for New Drivers – Under 25
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Choose A Higher Deductible
A car deductible is the amount youll pay out of pocket before your insurer covers the rest of the cost of an accident or repair. Having a low deductible, such as $100 or $250, is easier on your budget if youre in an accident, but youll pay far more each month for the convenience.
Aim for a higher deductible, such as $1,000. Its a big chunk of change in case of an accident, but your odds of needing to file a claim will hopefully be low. You can always set money aside each month into an emergency savings account to cover your deductible, especially if the savings on your auto insurance premium is significant.
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Tips To Lower Your New Driver Car Insurance Quote
Lets get right to it.
Here are our top tips to get the cheapest car insurance for new drivers:
- Don’t assume TPO is the cheapest level of cover: its reasonable to think that Third Party Only would be the cheapest option as it provides the least amount of cover. In fact, its the opposite, because insurers consider people who opt for third party policies riskier to insure.
- Add a 2nd or 3rd driver: if you add a named driver to your policy who is older and more experienced, the car insurance provider is much more likely to offer cheaper premiums. This because of the assumption that driving responsibilities will be shared and hence the riskier motorist will be spending less time behind the wheel. This often results in cheaper premiums.
- Take a Pass-Plus course: taking an advanced driving course such as Pass Plus could significantly improve your driving skills. Insurers will look favorably on this extra experience and it may result in cheaper new driver car insurance premiums.
- Opt for a Telematics aka Black Box Policy: telematics is a policy which prices your premiums depending on how you drive. A device known as a black box installed in your car monitors your actions behind the wheel so the better your driving, the less you pay for cover.
- Choose the right car: the bigger the engine, the more youll pay for your car insurance. Powerful cars are faster, so considered by insurers to be at a higher risk of being in an accident.
Carefully Review Your Coverages
Dont feel like you need to accept the first policy you see. Speak with your insurance agent to get auto insurance coverage recommendations for your specific needs.
You may want to consider raising the deductible on your policy. Your deductible is the amount of money youll need to pay out-of-pocket for your claims before the insurance company will take over the costs. If you raise your deductible, you can probably save money on your monthly insurance payments.
Be sure to carefully consider all of your options to make sure you pick a policy that gives you the coverage you need while also fitting your budget.
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Stay On Your Parent’s Insurance Plan
Staying on their parents’ insurance plan is the greatest option for a young driver to acquire inexpensive car insurance. Most of the time, the young driver’s parents’ insurance history, credit score, and driving history will result in lower rates than the new driver might find on their own.
A young driver can save thousands of dollars each year by staying on their parent’s auto insurance coverage for as long as feasible. College students can normally remain on their parent’s insurance policy as long as they do not drive their car while away from home.
How To Add A New Driver To An Existing Policy
Most insurance companies require that every licensed driver in your household be included on your car insurance policy. Fortunately, its easy to add a new driver to an existing policy.
You can usually add a new driver to an existing policy over the phone or online, through your insurance companys website or mobile app.
Youll need a few key pieces of information on hand to add a driver to a car insurance policy, including their:
-
Name and birthday
Cost of full-coverage car insurance for new drivers in every state.
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Best For Customizable Policies: The General
The General specializes in offering auto insurance to high-risk drivers. High-risk drivers include young drivers and drivers who have never been insured before. Of course, as a new driver, youve certainly never needed an auto insurance policy before now! The General realizes that high-risk driver policies can be more expensive than other types of policies.
Thats why it is dedicated to working with its customers to put together a policy that will work for your needs and for your budget. It offers a painless and easy process to put together your policy, and that starts at getting a free quote to see what it can offer you.
The General offers discounts to help you save on your policy, including discounts for taking and passing a drivers course and for being a good student. You may also qualify for a discount if you are a military member.
Car Wear And Tear Much Less Of An Impact During Highway Driving
Hands down, the winner here is highway driving. Your ability to avoid constant braking and acceleration from zero and screeching-tire turns will keep your car in better running condition longer.
City driving is tough on engines, brakes, and tires, but you can reduce the wear and tear by driving conservatively. If you can avoid hitting the accelerator hard when the light turns green, for instance, youll be able to avoid screeching stops at the next light. This will enable you to keep your brakes and tires in running shape longer, and get greater fuel efficiency and fewer gas station stops.
In the highway vs city driving contest, highway driving wins this one.
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Insurance For New Drivers: Everything You Need To Know
Insurance for new drivers includes policies for teen drivers, older drivers who are driving for the first time, immigrants and foreign nationals, and drivers with a gap in their insurance history. As The Zebra points out, new drivers often pay more for car insurance than experienced drivers because they don’t have a driver history that insurance companies can analyze. Without having a history to review, insurance companies are taking a risk when insuring new drivers.
Insurance for new drivers includes policies for teen drivers, older drivers who are driving for the first time, immigrants and foreign nationals, and drivers with a gap in their insurance history. As The Zebra points out, new drivers often pay more for car insurance than experienced drivers because they don’t have a driver history that insurance companies can analyze. Without having a history to review, insurance companies are taking a risk when insuring new drivers.
The Cheapest Car Insurance Company Overall: Geico
Geico is the cheapest major auto insurance company in the nation, according to NerdWallets most recent analysis of minimum coverage rates. Geicos average annual rate was $354, or about $29 per month. The company also earned a 4.5-star rating from NerdWallet, and you can read our Geico auto insurance review to learn why.
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How Much Is Insurance For A New Driver
Who is considered a new driver?
- Newly licensed teens
- Older drivers who have never had a license
- People with a gap in driving or insurance coverage
- Immigrants and foreign nationals
On average, new drivers can expect to pay $1,582 per year for minimum-coverage and $3,867 per year for full-coverage insurance. However, car insurance rates vary greatly depending on your age, where you live and other factors such as your credit score.
Usaa: Car Insurance For Military Families
USAA provides the best insurance for new drivers from military families. The auto insurance company consistently receives high marks from industry experts. AM Best rates USAAs financial strength at an A++, and USAA swept the board in multiple 2020 and 2021 J.D. Power studies.
Some benefits to getting USAA car insurance include quality customer service and a variety of discounts, like the military installation discount of up to 15-percent off for garaging a vehicle on a military base.
Our Verdict: Although USAA is only available to a small number of new drivers, we think the impressive ratings and discounts make it worth a look for anyone who is eligible. Find out more about coverage and eligibility in our complete USAA auto insurance review.
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Clean Driving Record Discount
You are eligible for this discount if you have a clean driving record and no at-fault accidents or tickets. When your Motor Vehicle Report is pulled at the start of your policy, you may expect this valuable savings to be applied to your policy. If you believe you have good driving habits but aren’t getting a discount, contact your insurance carrier and ask about a good driver discount.
Does Your Teen Driver Need Car Insurance
Teens can benefit from car insurance for a variety of reasons. Young drivers may spend quite a bit of time traveling to and from school, friends homes, and everywhere else. With less experience on the road, accidents are more likely, and so are other issues. Car insurance not only offers protection from financial and legal liability, but it can also provide extra features like roadside assistance.
It comes at an extra initial expense, but it will be worth it in the long haul if you have an incident on the road. To help save money, many parents will add teens to their policies so they can benefit from their parents experience and driving records. Regardless of what you decide, its important to get car insurance for your teen so you can meet state requirements.
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People With A Driving Or Coverage Gap
Your license could be expired because you spent some time abroad, or your lifestyle doesnt require any driving. If you don’t have a driving history to check, insurers can consider you a new driver. And without continuous auto coverage, they can consider you a high-risk driver, which can increase rates.
Even if you have some driving history, if youve had a gap in coverage at all, youll likely pay more for insurance, so its important to shop around for the best rates. Some companies make an exception for military deployment, so check with your insurer to see if that applies to you.
Since continuous coverage is one of the most important factors insurers consider, some may not accept your application if youve had gaps between policies. If thats the case, you can look for high-risk insurance companies that specialize in coverage for people having a hard time getting insured.
What Is The Best Insurance For First
We recommend full-coverage insurance for new drivers. Full-coverage insurance includes comprehensive and collision coverage, which pays for damage to your vehicle, regardless of fault â a feature that could be worth paying extra for, since first-time drivers are more likely to be involved in an accident. State Farm offers the best full-coverage insurance rates for most new drivers.
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How Can I Find The Best Price On Car Insurance
Once you decide how much car insurance you need, its time to start shopping for a policy. Rates often vary widely among companies for the exact same coverage, so its smart to compare car insurance quotes from multiple insurers. For example, in California, rates for a good driver range from $1,668 to $3,940 a range of about $2,270 for the exact same driver.
Heres what you should do to find the cheapest car insurance.
Distractions Can Be Advantageous In City Driving Vs Highway Driving
You definitely experience more of those while driving in the city. Youve got people crossing streets, vehicular congestion, constant stops and starts at street intersections, bicyclists, honking horns, and a constantly changing landscape to keep in mind.
The advantage is that the constant distractions help keep you alert. On a highway with little traffic and less landscape variation, its easy to experience road hypnotism. Thats a mental state where your brain goes into a sort of standby mode due to the lack of activity. In such a state, it might take you a microsecond longer to respond to emergencies, such as a deer darting across the road or a car ahead of you suddenly braking while youre traveling behind it at a high speed.
City distractions can also keep a sleepy driver awake easier than on the highway, when there are fewer decisions to make moment to moment. So keep speeds down and make conscious efforts to stay alert while driving on a quiet highway.
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