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A 25-year-old driver is often charged more for car insurance than an older driver because auto insurers deem these more-inexperienced drivers higher risk. But young drivers shouldn't have to break the bank to insure their cars.

Insurance.com gathered insurance rates from various companies to help you find affordable car insurance.

The cheapest car insurance for 25-year-olds is available from American National Finance, which offers insurance rates for this age group at about $75 a month, according to a 2022 Insurance.com analysis.

Young drivers can find affordable car insurance rates by shopping around and comparing quotes from different insurance companies. In fact, you can save up hundreds on your auto insurance by comparison shopping.

To help educate 25-year-old drivers on what insurance costs, Insurance.com analyzed price quotes from multiple carriers and put together this guide to help them find quality car insurance at affordable rates.

How much is car insurance for 25-year-olds?

A 25-year-old driver pays about $2,063 per year for a full coverage car insurance policy, based on the profile of a 25-year-old male driver. Whereas liability-only coverage costs $749 a year for a 25-year-old male driver, according to Insurance.com research.

However, rates can vary significantly depending on where you live, your driving record, the type of car you drive, and your coverage level. Therefore, it's important to compare rates from multiple insurers to make sure you're getting the best deal possible.

Cheap car insurance for 25-year-olds

Based on Insurance.com rate analysis, American National Finance has the cheapest car insurance rates at about $895 per year for 25-year-olds.

Nationwide is second on our list with an average annual rate of $1,422 a year and Geico comes in third at an average annual insurance cost of $1,446 for a 25-year-old driver.

Below is a list of insurance companies and the average premium they charge 25-year-old drivers.

CompanyAverage Annual Premium
American National Finance$895
Nationwide$1,422
Geico$1,446
Erie Insurance$1,575
American Family$1,593
Vermont Mutual$1,675
Travelers$1,679
State Farm$1,686
Auto Owners$1,801
Western National Mutual$2,004
Progressive$2,006
Farmers$2,271
Allstate$2,352
Auto Club$2,454
Shelter Insurance$2,607
Westfield Insurance$2,704
Mercury Insurance$2,710
CSAA Insurance$2,762
National General Insurance$2,823
Country Insurance$2,993
The Hartford$2,996
Chubb Ltd$3,086
Mapfre Insurance$3,414
Safeway Insurance$3,532
The Hanover Insurance$5,273

Cheapest car insurance for 25-year-old: male vs female

When it comes to car insurance, 25-year-olds face higher insurance rates than adult drivers. Also, there's a difference between what male and female drivers pay.

For instance, American National Finance has the cheapest rates for both 25-year-old male and female drivers. The insurance rate for a 25-year-old is $857 a year for female drivers, but male drivers pay $933 per year on average for the same coverage.

Some states forbid car insurance companies to use gender to calculate insurance rates. However, young male drivers across the country still end up paying slightly higher insurance premiums than females.

A male 25-year-old pays 5% more than female drivers for car insurance on average. This is because male drivers are seen as a greater risk by insurers. Men usually drive more miles than women and are more likely to not wear seat belts, drive impaired and speed, according to the Insurance Institute for Highway Safety.

The table below shows a list of companies that offer cheap auto insurance rates to 25-year-old males and females.

CompanyAverage Annual Rate for Female DriversAverage Annual Rate for Male Drivers
American National Finance$857$933
Vermot Mutual$1,298$2,052
Nationwide$1,383$1,460
Geico$1,435$1,456
American Family$1,557$1,629
Erie Insurance$1,582$1,567
State Farm$1,609$1,764
Travelers$1,656$1,702
Auto Owners$1,778$1,825
Western National Mutual$1,877$2,131
Progressive$1,993$2,018
Farmers$2,221$2,322
Allstate$2,313$2,391
Auto Club$2,356$2,552
Chubb Ltd$2,479$3,692
Westfield Insurance$2,565$2,842
Shelter Insurance$2,585$2,630
Mercury Insurance$2,649$2,770
CSAA Insurance$2,725$2,799
National General Insurance$2,768$2,879
Country Insurance$2,968$3,017
The Hartford$2,971$3,022
Mapfre Insurance$3,127$3,702
Safeway Insurance$3,311$3,753
The Hanover Insurance$4,992$5,555

Why do 25-year-olds pay so much for car insurance?

You can expect your car insurance rates to go down as you get older and gain more experience behind the wheel. However, 25-year-olds are still considered relatively inexperienced or rookie drivers, so they tend to pay more for coverage than older drivers.

But if you're looking to save money on your car insurance, you can do a few things, such as taking a defensive driving course or bundling your policy with other types of insurance.

How to save money on car insurance as a 25-year-old?

Many insurance companies are now offering discounts to young drivers who maintain good grades and have no accidents or moving violations on their records. However, there are a few other things that 25-year-olds can do to get even cheaper rates:

  • Shop around: The best way to save money on car insurance is by shopping around and comparing rates from different companies.
  • Enroll in a driving course: Young drivers can lower their car insurance rates by taking a defensive driving course.
  • Take advantage of any discounts: Most car insurance companies offer discounts to students who get good grades.
  • Keep your driving record clean: Avoiding traffic tickets or accidents and keeping your driving record clean in your 20s is an easy way to get lower insurance rates and save on your policy.
  • Drive a safe and reliable vehicle: Young drivers are inexperienced and should avoid driving fancy sports cars. It costs more to insure a high-end car, such as a Mercedes or BMW, than it does to cover an average sedan.

Final thoughts: car insurance for 25-year-olds

It's not easy to find car insurance for a 25-year-old. After all, most young drivers might be still in college or working low-paying jobs. Seeing rates near $2,063 can be jarring.

Shopping around can help 25-year-old drivers find affordable insurance for their cars. American National Finance Insurance provides the cheapest car insurance rates for male and female drivers. However, depending on your location, car's make and model, driver profile, and other factors, it may not always be the cheapest option. That's why comparison shopping is necessary.

Methodology

Insurance.com collected data from Quadrant Information Services for multiple insurance companies across the U.S. We used full coverage rates based on the sample profile of a 25-year-old driver with a clean driving record and for the coverage limit of 100/300/100, which represents $100,000 for bodily injury per person, $300,000 for bodily injury per accident and $100,000 for personal property damage.

To be on the list, the company must provide its services in at least ten states. You can use these averages to compare companies based on price, but your insurance rates may vary.

Sources:

Insurance.com has prepared in-depth car insurance guides for drivers of different ages. You will learn how much you expect to pay for insurance based on your age and how you can save on premiums each year. Check out the guides below: