Best cheap car insurance for teens and young drivers

Best car insurance for new drivers

When it comes to getting the best car insurance for drivers under 25, shopping around is a key part of the process. Without comparison shopping, it’s impossible to lock in the most affordable rates for your situation with a reputable insurance company. 

The best auto insurance companies for teenage drivers are State Farm, Geico and Nationwide, though USAA is also a top contender for those who are eligible. 

The table below highlights how top insurance companies stack up as an option for teen drivers. 

Cheapest car insurance for teens

The cheapest car insurance for teens is available through Travelers and Geico. USAA offers the most affordable rates to those who are eligible.

With Travelers, the average annual car insurance rate for female teens is $4,405 and $5,049 for males. Geico offers female teens an average annual rate of $4,783 and male teen drivers an average rate of $5,315. 

How much you actually pay will vary based on where you live and other risk factors. But these average costs provide an estimate of what you can expect to pay for teen car insurance. In addition to shopping around, seeking out discounts for good students and driver education courses can help you lock in affordable rates.

How much is car insurance for teens?

Unfortunately, insurance for teenagers is expensive. The cost of car insurance for teens varies by each unique situation. 

The younger the driver, the more expensive the car insurance. This is because statistics show that young drivers are far more likely to get into car accidents than older drivers. 

Even one year can make a big difference in car insurance costs. The risk is highest with 16-year-olds, who have a crash rate two times higher than 18- and 19-year-olds. The average car insurance rates for teenagers shown below reflect that risk:

• 16-year-old - $7,136
• 17-year-old - $5,938
• 18-year-old - $5,237
• 19-year-old - $4,116
• 20-year-old - $3,730

Car insurance rates drop significantly by age 20. Rates continue to decrease with age until about age 65. 

What is the cheapest way to get car insurance for a teenager?

The cheapest way to get car insurance for a teenager is by adding them to a parent’s insurance policy. It is usually not a good idea for a teen to buy their own insurance because it can be very expensive, and in many cases not even possible since minors can’t legally sign an insurance contract.

In addition to adding the teen driver to your policy, some other strategies for finding the cheapest rates include:

• Shop around: Every insurance company has slightly different rates. Getting quotes from multiple insurance companies will help you find the lowest rates for your situation. 
• Seek out discounts: Many insurers offer discounts for good grades, taking a driver education course, and proving safe driving habits through a telematics app. 

How much does it cost to add a teenager to a car insurance policy?

The cost of adding a teen to your insurance policy will vary based on your unique situation and their age. In general, adding a male teen driver to your insurance policy costs more than adding a female teen driver. 

The table shows the average cost of car insurance from top insurance companies when adding a teenager to an existing car insurance policy.

How to add a teen driver to your car insurance policy

If you need to add a teenager to your car insurance policy, call your current car insurance company. 

You can let them know that your teen now has a driver’s license and provide information about which vehicles the teen will be using. Don’t forget to ask about a discount during the sign-up process. Depending on your insurer, this simple question could lead to big savings. Come prepared to the call with your teen’s driver's license information and details about any new vehicles for a smooth process. 

Can a teenager get their own car insurance policy?

In most states, minors aren’t allowed to sign legal contracts like an insurance policy without a co-signature from a parent. That makes it difficult for a teenager to get their own policy until they reach the age of majority; in most states that’s 18.

If your teen gets their own policy, they’ll likely have a higher premium than they would by joining a policy with a parent or guardian. 

How to save on teenager car insurance

Teen auto insurance rates aren't set in stone. Here are a few easy ways to bring them down.

• Raise your deductible. An easy way to lower car insurance premiums is to raise your deductible. However, weigh this against young drivers being more likely to get into accidents. You have to pay the deductible amount when you get into an at-fault accident. Increasing your deductible from $500 to $1,000 will reduce your annual premium by approximately $400. You can also drop comprehensive and collision coverage if the car isn't financed or worth much. Use our auto insurance coverage calculator to figure out how much coverage you need.
• Choose the right car. A car with a high safety rating will be cheaper to insure. Use Insurance.com's list of car models to find the cheapest cars to insure.
• Delay getting a license. This isn't a popular option for an eager teen driver, but it's worth considering. If you compare the average rates for a 16-year-old and a 19-year-old, an older teen driver is significantly cheaper to insure. However, the insurer still charges higher rates for the first few years a driver is licensed.

Another way to minimize your insurance premium is to ask your insurer about discounts available.

Discounts for teen drivers

Below, we've listed the best discounts for teen drivers to get affordable car insurance.

• Good student discount. Good grades tell insurance companies you have a responsible kid. The required grade is usually a "B" average (3.0 grade point average) or higher. Typically, the student must be under the age of 25. This discount averages 16%.
• Defensive driving discount. You can take extra driver education or a defensive driving course. This means exceeding the minimum state-mandated driver's education and training. In most states, teen drivers can save around 5% on their premiums by taking a state-approved driver improvement class. Online classes are a convenient option but check with your carrier first to make sure it will lead to a discount.
• Student away from home discount. Most car insurance companies offer a student away-from-home discount for students who are away at college. This discount averages 18%.
• Good driver discount. Keep a clean record to get lower rates. This may not be available to newly licensed teens. 
• Low-mileage discounts. Pay-as-you-drive or pay-per-mile insurance can also reduce rates. Most car insurance companies offer discounts if you allow a telematics device to be placed in your vehicle so they can monitor your driving habits. This is considered "pay-as-you-drive." This can provide a discount of around 6%. With pay-per-mile, you'll pay for the distance you drive, rather than an average. Both discounts are great for teens or families that don't drive very often.
• Look for unrelated discounts. Review discounts unrelated to teens, like a multiple vehicle discount and a home and auto bundle discount for additional savings.

Car insurance for college students

College students can also find ways to reduce rates. If the student plans to leave a car at home and the college is more than 100 miles away, they could qualify for a "resident student" discount or a student "away" discount, as mentioned above.

College students will also qualify for the above-mentioned good student discount, with the same grade requirements.

Learner’s permit insurance

You should notify your insurance company as soon as a driver in your household gets a permit.

You won't see a rate increase for a driver with a permit; that happens when the driver is fully licensed. Be prepared for that time with the guidance on options and discounts found here. Also, it may be wise to contact your insurance provider for all options.

Excluding a teen driver from your insurance 

It's possible to tell your insurance company not to cover your teen, but it's not a given. This is called a named exclusion, which means your teen can't drive your car at all.

By endorsing your policy, you and your insurance company mutually agree that the driver isn't covered, which means neither is any accident the driver causes. Not all companies allow this, and not all states do either.

Best and cheapest teenage car insurance: Conclusion

Rates aren't everything, although, with a teen driver, they are a big part of the decision. However, you don't want to choose a policy with a sketchy insurance company, especially if the rates seem too good to be true. Make sure you research any insurance company you're considering signing up with. Read reviews and check AM Best financial ratings. Having a company that will be there when you need to file a claim is just as important as saving money (maybe more important).

In nearly every case, you are better off adding your teen to your insurance policy, but that doesn't mean you shouldn't shop around. Now is the time to compare rates for all of your family's insurance needs.