The Best and Cheapest Car Insurance for New Drivers
New drivers see higher rates, but there are ways to save money, such as qualifying for discounts and joining a family policy.
Free Car Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
UPDATED: Feb 24, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our auto insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different auto insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Feb 24, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our auto insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different auto insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Insurance rates for newly licensed teen drivers on their parents’ policy are double the national average
- Car insurance for a new driver is often cheap with Nationwide
- Obtain estimates from several insurance providers to compare costs
If you recently got your driver’s license, you’re probably also in the market for your first car insurance policy so you can drive legally.
Car insurance for new drivers can be pretty expensive, but there are ways to keep the cost affordable. We’ll explain how much you can expect to pay and how to lower your car insurance rates.
We’ll also discuss how insurance companies determine your rates and which companies might have the cheapest new driver car insurance.
What qualifies as a new driver?
There isn’t unique insurance made solely for new drivers, but insurance companies usually use these rules to determine status:
- Teens who recently obtained their driver’s license
- Adults driving for the first time
- Foreign nationals and immigrants entering the country
- Any driver with a gap in insurance coverage or driving time
New drivers get hit with high rates due to inexperience, but there are ways to save. Let’s dive more into these types of new drivers and how they can save money on car insurance.
Teens
Car insurance companies quote teen drivers higher rates because they’re statistically a higher risk on the road. The best way to lower the rates of auto insurance for teenage drivers is to add them to their parent or guardian’s policy — the only requirement is that they share the same permanent address. You can stay on your parents’ auto insurance for as long as you live in their house.
While a teen gets a better insurance quote on their family’s policy, it may still cause overall rates to increase. However, the teen driver still can access certain discounts like multiple drivers or car discounts. It’s always helpful to compare new driver insurance quotes online before deciding.
The good news is that insurers offer several discounts for students and teen drivers. Rates also improve over time with safe driving, as insurers tend to lower rates at age 25, assuming a clean record.
Foreign Nationals and Immigrants
Insurance companies still consider you a new driver even if you have experience driving in another country. Therefore, auto insurance for foreigners costs more regardless of how old you are. Insurers only consider domestic driving records when determining rates.
The same rule applies to credit history, which they use to calculate car insurance rates. It’s good to note that certain states don’t allow insurance companies to use credit when crafting auto insurance rates, including California, Hawaii, Massachusetts, and Michigan.
When renting a car, the easiest option will likely be to use the rental car company’s insurance, especially without a valid driver’s license or international driver’s permit. Otherwise, you may have trouble obtaining rental car insurance.
You’ll need a United States driver’s license for the state you plan to stay and drive in. States like California allow you to have a driver’s license no matter your immigration status. Once you get your license, shop around and compare auto insurance quotes to find the best rate and coverage.
Drivers With a Gap in Insurance Coverage
If your license expires for reasons like spending time abroad or not needing to drive for a long period, insurers will still consider you a new driver once you get your license back. Without proof of continuous coverage, a car insurance company can assume you’re a high-risk driver and increase your rates.
Even with some driving history, you’ll likely pay more for insurance if you have a coverage gap, so you should shop for the best rates. Some companies make an exception for military deployment — 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 you’ve had gaps between policies. If that’s the case, you can look for high-risk auto insurance companies that accept lapses in coverage or companies specializing in coverage for people having difficulty getting insured.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
First-Time Drivers’ Insurance Cost on Average
A first-time driver’s age gets considered when setting auto insurance rates. A quote for a 16-year-old is $3,343 per year on average. Policies are almost always the highest for teenagers compared to other ages.
Insurance Company | 16-Year-Old Male With a Clean Record | 16-Year-Old Female With a Clean Record | 18-Year-Old Male with a Clean Record | 18-Year-Old Female with a Clean Record |
---|---|---|---|---|
Geico | $312 | $298 | $254 | $220 |
State Farm | $349 | $311 | $284 | $229 |
Nationwide | $476 | $411 | $387 | $303 |
American Family | $480 | $390 | $390 | $288 |
Allstate | $638 | $608 | $519 | $448 |
Farmers | $742 | $778 | $603 | $573 |
Liberty Mutual | $778 | $716 | $633 | $528 |
Progressive | $814 | $801 | $662 | $591 |
Travelers | $897 | $709 | $729 | $523 |
National Average | $610 | $558 | $496 | $411 |
On a good note, safe drivers will see a drop in their rates by approximately 12% to 20% once they turn 25.
Best Auto Insurance for New Drivers Under 25
Allstate offers the lowest-priced minimum auto insurance coverage rates for new drivers 25 and lower. First-time drivers pay $2,743 on average for car insurance annually. Allstate, on the other hand, costs 56% less than the average at $1,205 per year.
First-time drivers can find the best rates on State Farm auto insurance for full coverage. A full coverage auto insurance policy with the company costs $3,308 per year or $276 monthly. The average quote is $6,527 yearly, double State Farm’s rate.
Best Auto Insurance for New Drivers Over 25
New drivers over 25 can find the most affordable minimum coverage with Allstate for auto insurance. Allstate charges $395 yearly, which is 62% less than the national average auto insurance quote for this group of individuals.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Best Auto Insurance for New Drivers on a Family Car Insurance Policy
Teen drivers can obtain notably better rates by using their parent’s policy — this may also work for an older relative if allowed by the insurer. Allstate, State Farm, and Geico rates are all more affordable than average.
However, Geico auto insurance has the cheapest out of the three, averaging $1,419 per year.
Auto Insurance Rates by Credit Rating and Age
A poor credit score can increase your rates in most states, so building a good credit score before driving is a great way to get more affordable auto insurance as a new driver. Here is a good estimation of how credit and car insurance rates correlate.
Insurance Company | Rates with Poor Credit | Rates with Fair Credit | Rates with Good Credit |
---|---|---|---|
Geico | $148 | $100 | $82 |
Nationwide | $165 | $132 | $120 |
Travelers | $194 | $127 | $107 |
State Farm | $200 | $117 | $90 |
American Family | $203 | $136 | $116 |
Progressive | $206 | $137 | $109 |
Farmers | $269 | $161 | $139 |
Allstate | $296 | $196 | $166 |
Liberty Mutual | $357 | $226 | $176 |
National Average | $226 | $148 | $123 |
As you can see, the better the credit, the cheaper your rates are. Auto insurance for drivers with bad credit almost always comes with a higher price.
Tips to Get Lower Auto Insurance Rates for New Drivers
Still looking for ways to lower your monthly car insurance premiums? Read over the tips below to see if you could save more.
Shop Around for Auto Insurance Coverage
Every auto insurance company has a unique way of coming up with rates, so there may be cheaper options than the first quote you receive. Therefore, you should get at least three to five quotes from different companies before purchasing car insurance coverage.
For new drivers, you should also consider options the insurer provides alongside its rates. Eligible discounts and reputation matter when choosing the right car insurance company. So even after buying a policy, it’s always good to keep looking for the best options.
Lower Coverage Amounts
To lower your risk factors and rates, purchase only as much insurance as you need. If you struggle to find affordable auto insurance, you can also research the minimum auto insurance required in your state and shop for a policy from there.
If you decide you don’t need things like collision insurance or comprehensive insurance, you could save a lot on your monthly rates. You can also say no to additional coverage add-ons like rental reimbursement insurance and roadside assistance.
Increase Your Deductible
One easy way to lower your rates is to get a higher auto insurance deductible. Your deductible is the amount you must pay if you file a claim. The larger your deductible, the cheaper your premium.
However, avoid choosing a deductible you can’t afford to pay out of pocket.
Maintain Safe Driving Habits
As a new driver, the best way to lower your rates is to drive safely and avoid getting moving violations and car accidents. Having a few years of safe driving will lower your rates over time.
These tips are great ways to lower your rates if you’re a new driver. Each one can significantly help you save money.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
The Bottom Line on Auto Insurance for New Drivers
Finding the best car insurance for new drivers can be challenging — there aren’t many ways to get around a higher rate. Car insurance discounts are the easiest way to lower your rates.
Here are the most common car insurance discounts a new driver can obtain:
- Multi-policy discounts
- Defensive driver discount
- Equipment discount
- Safe driver insurance discount
- Profession/occupation discount
- Good student discount
Make sure you’re researching and discussing these discounts with multiple insurance companies to get the best insurance for new drivers at a reasonable rate.
Frequently Asked Questions
What information do I need to start a new auto insurance policy?
For any new insurance policy, you’ll need to provide a driver’s license, Social Security number, bank information, and vehicle information — this goes for adding a new driver to an existing policy too.
Why is auto insurance so expensive for new drivers?
New drivers are statistically more likely to cause a car accident. Approximately 25% of all claims come from new drivers under 25, causing insurance rates to be more expensive initially.
What is a first-time driver’s best choice for auto insurance?
A good rule of thumb for first-time drivers is to have full coverage. With full coverage, the driver has liability, comprehensive, and collision coverage.
Comprehensive and collision coverages pay for your own vehicle damages, whereas liability pays for damages and injuries you cause to others. State Farm currently offers new drivers the best and most affordable full-coverage options.
Is it necessary for a new driver to have car insurance?
In every state, you must have car insurance or proof of financial responsibility to drive legally.
So, for the most part, new drivers must purchase at least liability insurance, which pays for other peoples’ injuries and property damages you cause. You can then decide if you want to purchase additional coverage, like collision or comprehensive.
What does a new driver need to get auto insurance?
To buy auto insurance as a new driver, you must show personal information, car information, and payment information.
How much does auto insurance typically cost for a 16-year-old?
Full coverage for a 16-year-old girl costs approximately $813 monthly, and for a boy of the same age, rates cost $876 a month. Remember that the cost of auto insurance for teenage drivers varies by location and is subject to change.
How much does car insurance drop when you turn 25?
A driver who just turned 25 can expect an average 11% decrease in auto insurance rates. On the other hand, rates decrease more between the ages of 20 and 21 as well as 18 and 19.
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.